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Home › Tax glossary › Making Tax Digital for Income Tax
UK tax glossaryUpdated October 2026What is Making Tax Digital for Income Tax?
A plain-English explanation from Cangaf's ACCA-qualified accountants, with the 2026/27 rules.
Making Tax Digital for Income Tax in briefMaking Tax Digital (MTD) for Income Tax requires sole traders and landlords to keep digital records and send HMRC quarterly updates using compatible software, then a final declaration by 31 January. It started in April 2026 for those with qualifying income over £50,000, extends to over £30,000 from April 2027 and over £20,000 from April 2028.
Key facts
| Qualifying income | Gross self-employment and property income, before expenses. Salary and pensions don't count |
| Start dates | April 2026 (over £50,000), April 2027 (over £30,000), April 2028 (over £20,000) |
| Quarterly updates | Due 7 August, 7 November, 7 February and 7 May |
| Final declaration | By 31 January after the tax year, replacing the tax return |
What changes for you
Instead of one tax return a year, you keep income and expense records in software and send a summary every quarter. Your tax is still paid on the same dates, including payments on account.
Which year decides
HMRC looks at your tax return from two years earlier. For example, your 2025/26 qualifying income decides whether you need to join in April 2027.
Penalties
Late quarterly updates build up penalty points. Once you reach the threshold, a £200 penalty applies for each further late submission. Late payment penalties are separate.
Common questions
Does my salary count towards the MTD threshold?
No. Only gross income from self-employment and property counts. A landlord with a £60,000 salary and £15,000 of rent is below the £20,000 threshold.
Do I need special software?
Yes. You need HMRC-recognised software, or bridging software that connects a spreadsheet to HMRC. We set it up for our clients.
Are partnerships and limited companies included?
Limited companies aren't included. Partnerships will join later, at a date still to be confirmed.
Official guidance: Find out if and when you need Making Tax Digital (GOV.UK)
