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It started in April 2026, and it is real
Making Tax Digital for Income Tax went live on 6 April 2026. This is not another delay announcement. It has been postponed several times since it was first promised for 2018, which is exactly why a lot of people stopped listening, but this phase is now in force.
If you are a sole trader or landlord with qualifying income over £50,000, you are in it now. That threshold drops to £30,000 from 6 April 2027, and to £20,000 from 6 April 2028. Partnerships have no confirmed date yet.
How they decide whether you are in
This is the bit people get wrong. Qualifying income is your gross income from self employment and property, added together, before expenses. Not your profit.
So a landlord with £35,000 of rent and a small consultancy turning over £20,000 has qualifying income of £55,000, and is mandated, even if the actual profit after mortgage interest and costs is a fraction of that. HMRC looked at your 2024/25 return to decide.
If you are close to a threshold, that arithmetic is worth doing carefully rather than assuming you are outside it.
What you actually have to do differently
Three things change. You must keep digital records, which means the shoebox of receipts and the annual spreadsheet reconciliation is over. You must submit a quarterly update to HMRC through compatible software. And you finish the year with a final declaration that replaces the old self assessment return.
The quarterly updates are cumulative and they are not miniature tax returns. You are not calculating tax four times a year, and you do not pay quarterly. Payment dates are unchanged. It is a summary of income and expenses to date, and errors can be corrected in a later quarter.
The penalty easement in year one
There is a genuine concession worth knowing about. For those newly mandated, there are no late submission penalties for quarterly updates during 2026/27. First year taxpayers also get an extra 15 days, so 30 in total, before a late payment penalty bites.
That is a soft landing, not a holiday. The obligation exists and the records still need to be digital. But if you are getting the rhythm wrong in the first few quarters, it is not going to cost you a penalty this year.
What to do now if you are in scope
Get the software sorted before the quarter end, not on the deadline. Compatible software is the mechanism, and there is no manual workaround, so this is not something you can leave until the day before.
Connect your business bank account to it. The single biggest time saving in MTD is not having to type anything in, and the people who find it painful are almost always the ones still doing manual entry.
If you have both a trade and property income, understand that they are reported separately, so you may be filing more updates than you expect.
Common questions
Do I still file a tax return?
Not in the old form if you are mandated. The final declaration replaces it, but it does the same job, and it is where reliefs and other income get picked up.
Can I opt out?
Not if you meet the threshold. There are exemptions on grounds such as digital exclusion, but they have to be applied for and granted, not assumed.
Do I pay tax quarterly now?
No. Payment dates are unchanged. This is a reporting change, not a payment change, whatever you may have read.
This reflects HMRC guidance as at July 2026. If you are unsure whether you are in scope this year or next, get in touch and we will check the threshold against your actual figures.
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