When Does MTD for Income Tax Start? Does It Apply to You?

The first phase of Making Tax Digital for Income Tax Self Assessment has now begun for the first group of taxpayers. From 6 April 2026, many sole traders and landlords with qualifying income above £50,000 must keep digital records, use compatible software and send quarterly updates to HMRC.

MTD is based on gross qualifying income, not profit. A landlord with £30,000 of rental income and a sole trade with £25,000 of income may be in scope even if expenses reduce taxable profit below £50,000.

When is the start date for MTD for Income Tax Self Assessment?

MTD for Income Tax starts in phases:

Qualifying income threshold	Tax year HMRC checks	MTD start date
Over £50,000	2024 to 2025	6 April 2026
Over £30,000	2025 to 2026	6 April 2027
Over £20,000	2026 to 2027	6 April 2028

Do not rely only on receiving a letter. HMRC may write to people it believes are in scope, but you remain responsible for checking your own position.

The start date matters, but the bigger issue is whether your records are ready before the first quarterly update is due.

Who needs to use MTD ITSA from April 2026?

MTD applies if you are an individual registered for Income Tax Self Assessment, you receive self-employment income, property income, or both, and your qualifying income is above the relevant threshold.

You may be affected if you are:

A sole trader with gross income above the threshold.

A landlord with rental income above the threshold.

Someone with both self-employment and property income which, when added together, crosses the threshold.

How do you work out qualifying income for MTD?

Qualifying income for MTD means the total gross income you receive from self-employment and property in a tax year. It does not include PAYE employment income, dividends, pensions or your share of profit from a partnership as an individual partner.

This is where many people get caught out. HMRC looks at income before expenses. For example, £28,000 of rental income and £24,000 of sole trade income gives total qualifying income of £52,000. That would put you above the first MTD threshold, even if your taxable profit is much lower after allowable costs.

What changes under MTD for sole traders and landlords?

MTD for sole traders and landlords changes the reporting rhythm. It does not remove your annual tax return obligation, and it does not change the dates when tax is due.

Once you are in scope, you will normally need to:

Keep digital records of self-employment and property income and expenses.
Use MTD-compatible software or suitable bridging software.
Send quarterly updates to HMRC.
Finalise the year through compatible software.
Submit the tax return and pay tax due by 31 January after the tax year.

Quarterly updates are summaries taken from your digital records. HMRC does not receive every individual receipt or invoice, but the figures must come from properly maintained records.

For anyone still relying on paper files or an unconnected spreadsheet, this is the operational shift to deal with now. Our Making Tax Digital support can help with software selection, set-up and submissions.

When are quarterly updates due under MTD?

The standard update periods and deadlines are:

Update	Period covered	Deadline
First update	6 April to 5 July	7 August
Second update	6 April to 5 October	7 November
Third update	6 April to 5 January	7 February
Fourth update	6 April to 5 April	7 May

If records are kept throughout the year, each update should be manageable. Regular bookkeeping and management of accounts help keep income, expenses and tax estimates visible during the year.

What should you do before signing up for MTD?

Before signing up, check whether you are in scope, confirm which income sources count, and choose software that fits how you work. HMRC does not provide MTD software, so this decision matters.

A practical preparation list is:

Check gross income from self-employment and property.

Separate business, property and personal transactions where possible.

Choose software that can handle your income sources.

Authorise your accountant or tax agent if they will act for you.

Start creating digital records before the first deadline.

A landlord who also works as a sole trader may need records for both. Someone with VAT obligations also needs to check whether their existing VAT software can support MTD for Income Tax.

Can MTD-compatible software make the change easier?

MTD-compatible software should do more than meet basic compliance requirements. The right system should reduce manual entry, connect with bank feeds, scan receipts where needed, support property and self-employment records, and allow quarterly updates to be submitted correctly.

Software will not fix poor record-keeping on its own. It needs a clear process behind it: who enters transactions, how often records are reviewed, how receipts are stored, and when figures are checked before submission.

Prepare for the start date, not the deadline

MTD is not just a filing change. It is a record-keeping change. The people who handle it best will know their income sources, keep records current and use software that matches their circumstances.

The right first step is to check your qualifying income. The second is to decide how your records will be kept from this point forward. Once those two points are clear, the rest of the process becomes far more manageable.

Need help checking whether MTD applies?

If you are unsure whether you are in scope, or need help choosing software, setting up records or preparing for quarterly updates, call 01322 250 001 or email info@adams-accountancy.co.uk.

We are ICAEW Chartered Accountants, with more than 50 years of combined experience supporting SMEs, local businesses, sole traders, subcontractors and individuals. We also support digital accounting tools, including Dext for receipt management.

FAQs about Making Tax Digital for Income Tax