Making Tax Digital for Income Tax: do I need to sign up, and when?

The short version

HMRC checks your tax return for	Qualifying income	You need it from
2024 to 2025	over £50,000	6 April 2026
2025 to 2026	over £30,000	6 April 2027
2026 to 2027	over £20,000	6 April 2028

• Over means over: exactly £50,000, £30,000 or £20,000 doesn't bring you in.
• £20,000 or less: automatically exempt, and you carry on with Self Assessment as now.
• It's in law: the £20,000 stage isn't just announced. The Income Tax (Digital Obligations) Regulations 2026 set £20,000 for 2026-27 and every later tax year.
• HMRC should write to you if you're over, but it's still up to you to check and sign up if no letter comes.
• Partnerships don't need to use it yet. HMRC will set out a timeline later.

What counts as qualifying income

Qualifying income is your total income from self-employment and property before expenses, also called turnover, as shown on the tax return HMRC checks. If you're a sole trader and a landlord, the two are added together: GOV.UK's example is £25,000 of rent plus £27,000 of self-employment income, which is £52,000.

Counts	Doesn't count
Sales or takings from all your sole trader businesses	Wages and salary taxed through PAYE
Rent from UK property, and overseas property if you were UK resident	Your share of profit from a partnership as an individual partner
Your share of rent from a property you own jointly	Dividends, including from your own company
Income from a business or property you stopped, if you still have another one	The State Pension and private pensions

Also from GOV.UK: if you use the cash basis and are VAT registered, VAT counts if you include it in your income. Qualifying care relief receipts, income from UK REITs or PAIFs and basis period transition profits don't count. If you only had income for part of the year, HMRC scales a sole trader's income up to 12 months; landlords have to do this themselves.

What it means in practice

• Software: use software that works with Making Tax Digital for Income Tax. HMRC doesn't provide any. You can keep using spreadsheets, but you'll need software that links to them (bridging software) to send your updates and tax return.
• Digital records: record each self-employment and property income and expense in the software, with the amount, date and Self Assessment category. Keep your usual records and supporting documents too.
• Quarterly updates: every 3 months, send HMRC a summary of each business's income and expenses for the tax year so far. They're summaries, not tax returns, and you must send one even if nothing happened.
• Tax return: add your other income, such as savings interest or dividends, and submit your tax return through the software by 31 January after the tax year. HMRC adds things it already knows, such as PAYE pay and pensions.
• Paying tax: doesn't change. Your bill and payment dates are the same as now.
• Your last normal return: you still send the return for the year before you start the usual way.

Standard update period	Calendar update period	Deadline
6 April to 5 July	1 April to 30 June	7 August
6 April to 5 October	1 April to 30 September	7 November
6 April to 5 January	1 April to 31 December	7 February
6 April to 5 April	1 April to 31 March	7 May (the following tax year)

Standard periods are the default and follow the tax year. Use calendar periods if your accounting period runs from 1 April to 31 March, and choose them in your software before your first update. Every date is in the UK tax deadlines calendar, which you can add to your phone.

Penalties

New penalties replace the current ones from the year you join. For 2026 to 2027, HMRC won't give penalty points for late quarterly updates, but you still have to send them before you can submit your tax return. After that, each missed quarterly update or tax return deadline gets one penalty point, and at 4 points you get a £200 penalty (and another £200 for each further missed deadline). Late payment penalties are separate: in your first year you have 30 days to pay or set up a payment plan before a penalty, then 15 days in later years.

Exemptions

If you're exempt you don't use Making Tax Digital for Income Tax, but you still send a Self Assessment tax return as normal.

• Automatic, no need to apply: qualifying income of £20,000 or less; no National Insurance number before the tax year starts; you told HMRC on your 2024 to 2025 return that you can't provide information to HMRC and have a power of attorney or legally appointed deputy, controller or guardian.
• Automatic for 2026 to 2027 only, if on your 2024 to 2025 return: averaging relief as an individual (farmers, market gardeners, creative artists), qualifying care relief (foster and kinship carers), the SA107 trusts page or the SA109 residence page. You'll still need it from April 2027 if your 2025 to 2026 qualifying income is over £30,000.
• Automatic for now: ministers of religion (SA102M), Lloyd's members (SA103L) and anyone who gets or transfers Married Couple's Allowance or Blind Person's Allowance. HMRC will set out when these groups join.
• Apply to HMRC: if you're digitally excluded, meaning it isn't reasonable for you to use software because of your age, a health condition or disability, your religious beliefs, or because you can't get internet access at home or at your business because of where you are, and can't get it at a suitable alternative location. HMRC won't accept an application if the only reason is that you filed on paper before, aren't familiar with software, have only a few records, or it will cost time or money. You also apply if the items above weren't on your 2024 to 2025 return but you reasonably expect them on a later one.

See find out if you can get an exemption and apply for an exemption on GOV.UK.

Worked examples

1. Sole trader and landlord (GOV.UK's example)
Priya's 2024-25 tax return shows £27,000 of self-employment turnover and £25,000 of rent, both before expenses. Her qualifying income is £52,000, which is over £50,000, so she should have started Making Tax Digital for Income Tax on 6 April 2026. If she hasn't signed up, she can still do it now. Her first-year updates are due by 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027, and her 2026-27 tax return goes through her software by 31 January 2028.

2. Exactly £50,000
Tom's 2024-25 turnover was exactly £50,000. That isn't over £50,000, so he didn't need to start in April 2026. But if his 2025-26 turnover is the same, it's over the £30,000 threshold for that year, so he'll need it from 6 April 2027.

3. A day job doesn't count
Sam earns a £40,000 salary through PAYE and has a side business with £32,000 of turnover in 2025-26. Only the turnover counts, and it's over £30,000, so Sam needs Making Tax Digital for Income Tax from 6 April 2027. The salary still goes on the tax return, but HMRC adds PAYE income for you.

4. Joint landlords
Two sisters own a flat together that brings in £50,000 of rent a year, split equally, and neither is self-employed. Each sister's qualifying income is her share, £25,000. On 2026-27 figures that's over £20,000, so each would need it from 6 April 2028.

5. Small side hustle
Jo's 2026-27 turnover is £18,000. That's £20,000 or less, so on GOV.UK's current guidance she's automatically exempt and keeps doing Self Assessment as now.

6. Started part-way through the year
Alex starts as a sole trader in October 2026 and has £12,000 of turnover in the 6 months to 5 April 2027. Income for part of a year is scaled up to a full year, so his qualifying income is treated as £24,000. That's over £20,000, so he'd need it from 6 April 2028.

Results from the checker on this page.

Prefer paper records alongside your software?

Making Tax Digital for Income Tax needs compatible software: a paper book isn't a digital record and doesn't replace it. But plenty of people like to jot things down as they happen, on the van seat or at the kitchen table, then key them in each week. Our printed record books are for that day-to-day note-keeping, and for anyone under the threshold who just needs tidy Self Assessment figures:

• Self Employed Accounts Book (£7.99): an April-to-March cash book for sole traders, with monthly income and expense pages. Also available from Lulu (£9.99).
• Rental Income & Expenses Record Book UK (£7.99): rent, costs and mortgage interest for 1 to 4 properties.
• Mileage Log Book (£7.99): business journeys and a yearly mileage claim worksheet. Also available from Lulu (£9.99).

Sold by Amazon (the Self Employed Accounts Book and the Mileage Log Book are also sold by Lulu). Not connected to HMRC, and not Making Tax Digital software. Spreadsheet fans: our Excel and Google Sheets templates help you track income and costs, but they aren't Making Tax Digital software either.

Frequently asked questions

Do I need to sign up for Making Tax Digital for Income Tax?
You need to use it if you're a sole trader or landlord registered for Self Assessment and your qualifying income is over the threshold for the tax year HMRC checks. Over £50,000 in 2024-25 means from 6 April 2026, over £30,000 in 2025-26 means from 6 April 2027, and over £20,000 in 2026-27 means from 6 April 2028. If your qualifying income is £20,000 or less, you're automatically exempt.

What counts as qualifying income?
Your total income from self-employment and property before expenses, also known as turnover, from the tax return HMRC checks. If you have both, they're added together. Wages taxed through PAYE, your share of profit from a partnership as an individual partner, dividends, the State Pension and private pensions don't count.

Which tax year's income decides when I start?
The tax year two years before you start. HMRC looks at your 2024-25 tax return for April 2026, your 2025-26 return for April 2027 and your 2026-27 return for April 2028. For example, if your 2025-26 return (due by 31 January 2027) shows qualifying income over £30,000, you'll need to use Making Tax Digital for Income Tax from 6 April 2027.

Is the threshold based on profit or turnover?
Turnover. Qualifying income is your income before expenses, so a landlord with £25,000 of rent and £10,000 of costs has qualifying income of £25,000, not £15,000.

Is the £20,000 threshold from April 2028 definite?
Yes, it's in law. The Income Tax (Digital Obligations) Regulations 2026 set the qualifying amount at £50,000 for 2024-25, £30,000 for 2025-26 and £20,000 for 2026-27 and any later tax year, and GOV.UK says you'll need to use it from 6 April 2028 if your 2026-27 qualifying income is over £20,000.

What do I have to do under Making Tax Digital for Income Tax?
Keep digital records of your self-employment and property income and expenses in compatible software, send a quarterly update every 3 months for each business, and submit your tax return through the software by 31 January after the tax year ends. The quarterly update deadlines are 7 August, 7 November, 7 February and 7 May. How and when you pay your tax doesn't change.

Are there penalties for missing a quarterly update?
Not for the 2026-27 tax year: HMRC won't give penalty points for late quarterly updates in that year, but you still have to send them before you can submit your tax return. After that, each missed deadline gets a penalty point, and when you reach 4 points you get a £200 penalty. Late tax returns get points in every year.

Can I get an exemption?
Some people are exempt automatically, for example if you don't have a National Insurance number before the start of the tax year, or if certain pages or claims were on your 2024-25 tax return. If your age, a health condition, a disability, your religious beliefs or where you live mean it isn't reasonable for you to use software, you can apply to HMRC for a digitally excluded exemption. HMRC won't accept an application only because you filed on paper before, aren't familiar with software, have few records, or because it will take extra time or cost.

Can I keep using spreadsheets or a paper book?
GOV.UK says you can keep using spreadsheets for your records, but you'll need software that links to them (bridging software) to send quarterly updates and your tax return. A paper book on its own isn't a digital record, though you still have to keep your usual records and supporting documents, such as invoices and bank statements.

Do partnerships need to use Making Tax Digital for Income Tax?
Not yet. HMRC says partnerships will need to use it in the future and will set out the timeline later. Your share of profit from a partnership as an individual partner doesn't count towards your qualifying income.

More for sole traders and landlords

• Tax set-aside calculator: Making Tax Digital doesn't change your bill, so estimate it and put a monthly amount aside.
• Rental income tax calculator: your taxable rental profit, the property allowance and the 20% mortgage interest credit.
• £1,000 trading allowance guide: for very small side hustles, when you need Self Assessment at all.
• Landlord rental income tax guide: allowable expenses and how rental profit is taxed.
• UK tax deadlines calendar: quarterly update and Self Assessment dates in your own calendar.

Sources

All rules and figures on this page were checked on 19 October 2026:

Find out if and when you need to use Making Tax Digital for Income Tax (GOV.UK)
Work out your qualifying income for Making Tax Digital for Income Tax (GOV.UK)
Find out if you can get an exemption from Making Tax Digital for Income Tax (GOV.UK)
Apply for an exemption from Making Tax Digital for Income Tax (GOV.UK)
Sign up for Making Tax Digital for Income Tax (GOV.UK)
Using Making Tax Digital for Income Tax for the first time (GOV.UK)
Create digital records (GOV.UK)
Send quarterly updates (GOV.UK)
Submit your tax return (GOV.UK)
If your circumstances change (GOV.UK)
Penalties for Making Tax Digital for Income Tax (GOV.UK)
The Income Tax (Digital Obligations) Regulations 2026, SI 2026/336 (legislation.gov.uk), regulations 22 to 27

Not covered: partnerships (no timeline yet), agents signing up clients, trusts and estates, non-resident companies, people volunteering early (different penalty rules) and the detail of late payment penalty rates. HMRC's own check if you need to use Making Tax Digital for Income Tax tool asks about your actual tax returns. General guidance only, not tax or financial advice.