MTD for Income Tax: what the 2026 and 2027 deadlines mean

Making Tax Digital for Income Tax has been on the horizon long enough that some people have stopped paying attention to it. That is a mistake. The first mandatory phase begins in April 2026, now a matter of weeks away, and the people it affects are not large companies with finance teams. They are sole traders and individual landlords, many of whom have kept records in a spreadsheet, a shoebox, or their accountant’s head for years.

This piece sets out what is changing, who is in scope and when, and what a sensible run-up looks like. It is guidance, not a sales pitch. If you run a trade or let property and your income sits near the thresholds below, the message is simple: start now, because the habits MTD asks for are easier to build in calm conditions than under a deadline.

What MTD for Income Tax actually is

Making Tax Digital for Income Tax, or MTD ITSA, changes how self-employed people and landlords report to HMRC. It does not change how much tax you owe, only the mechanics of recording and reporting it.

Three things sit at the centre of it:

• Digital record-keeping. You must keep your business or property income and expenses digitally, in software that meets HMRC’s requirements. A drawer of receipts reconciled once a year no longer satisfies the rules on its own.
• Quarterly updates. Instead of a single annual self-assessment return, you send HMRC a summary of your income and expenses every quarter, through compatible software.
• A final declaration. After the four quarterly updates, you confirm the year’s figures and make any adjustments, replacing the familiar end-of-year self-assessment step.

The quarterly updates are summaries, not full returns, and not the moment you pay tax. The tax position is still settled through the final declaration and the existing payment dates.

Who is in scope, and from when

MTD for Income Tax is being phased in by income level. The figure that matters is your qualifying income: your gross income from self-employment and property before expenses, added together.

• From April 2026: those with qualifying income over £50,000.
• From April 2027: those with qualifying income over £30,000.
• From April 2028: the regime is set to extend to those with qualifying income over £20,000.

A few points are worth holding onto. The thresholds are based on gross income, not profit, so a landlord with two properties or a tradesperson with healthy turnover and thin margins can be caught more easily than they expect. Income from self-employment and property is combined for the test, so a modest sideline plus a couple of let flats should be added together rather than judged in isolation. The assessment uses a prior tax year’s figures, so whether April 2026 applies to you is a question you can answer now.

If you are below the current threshold but close to it, treat the next phase as your phase. The £50,000 and £30,000 dates arrive a year apart, and £30,000 of gross income is not a high bar for an active sole trader.

What changes in practice

For most people the largest shift is not technical, it is rhythm. Annual record-keeping rewards procrastination: a year of paperwork accumulates and gets dealt with in one uncomfortable January week. Quarterly reporting removes that option, and that is the point. Four lighter touchpoints a year tend to produce cleaner records than one heavy one.

Being ready means:

• Income and expenses recorded as you go, in compatible software, rather than reconstructed from memory months later.
• A working method for capturing receipts and invoices digitally, so the records exist in the form HMRC expects.
• A clear view, each quarter, of what the software will send, and a moment to check it before it goes.

Where bridging software connects existing spreadsheets, the digital links between your records and the submission must hold together, so figures are not retyped by hand. None of this is exotic: it is ordinary bookkeeping, done a little more often and kept in a form that software can read.

How to prepare in good time

The worst version of this transition starts the week before a deadline. The calm version starts months earlier and treats the first few quarters as practice.

A reasonable order of work looks like this:

1. Confirm whether you are in scope, and when. Add your gross self-employment and property income together and compare against the thresholds. If you are over £50,000, April 2026 is yours. If you are between £30,000 and £50,000, April 2027 is yours, and you have a year to rehearse.
2. Choose compatible software and learn it before you must rely on it. The tool only earns its keep if you can record a transaction without thinking about it; familiarity built in a quiet quarter beats features discovered under pressure.
3. Fix your record-keeping habit. Decide how receipts get captured, how often you reconcile, and who does it. The system that survives is the dull, repeatable one.
4. Run a dry quarter if you can. Keeping records to the new standard before you must submit them removes most of the surprises.

This is also where the relationship with an accountant changes shape, usually for the better.

The role of the accountant

Quarterly reporting does not make accountants less useful; if anything it pulls them forward in the year. The old pattern, where an accountant met the records once at year end and worked miracles in January, fits poorly with a regime that asks for a summary every quarter.

A good accountant under MTD does a few things that matter. They confirm your scope and timing, so you are neither caught out nor preparing for a deadline that does not apply to you. They help you choose and set up software that suits how you work, review the quarterly figures so errors are caught while small, and still handle the final declaration and the judgement calls, the adjustments and reliefs, that software does not make for you.

The shift is from a single annual scramble to a steadier, lighter touch through the year, and that suits both sides.

This is the area Tiraverse works in. We build MTD-ready software designed to meet HMRC’s requirements for digital records and quarterly updates; you can read more on our tax and accountancy solutions page. To be clear about what that means: built to HMRC’s requirements describes how the software is made, not a claim that it is recognised, approved, or listed by HMRC. When choosing any tool, check its current status on HMRC’s own published list before you commit.

Frequently asked questions

Does MTD for Income Tax change how much tax I pay?

No. It changes how you keep records and report to HMRC, not the rules that determine your liability. Your tax is still worked out on your profits, and the existing payment dates continue to apply. What changes is the cadence of reporting and the requirement to keep digital records in compatible software.

I keep good records in a spreadsheet. Is that still allowed?

A spreadsheet on its own does not meet the requirement, but spreadsheets are not banned. You can use bridging software that connects your spreadsheet to HMRC, provided the digital links hold and figures are not manually retyped. For many people, though, moving the day-to-day record-keeping into compatible software is simpler than maintaining a spreadsheet plus a bridge.

My income is under the threshold. Can I ignore this?

Only for now, and only if you are comfortably below. The thresholds step down over three years, from £50,000 in April 2026 to £30,000 in April 2027 and a planned £20,000 in April 2028. If your gross income is near the next step, treat that step as your start date. Building the habit early costs little; building it under a deadline costs a great deal more.

MTD for Income Tax is, in the end, a change of routine rather than a change of obligation. The figures you report are the ones you would have reported anyway; the rules simply ask that you keep them in digital form and look at them four times a year instead of once. Approached early, with the right software and a sensible habit, it is a manageable adjustment. Left to the last quarter, it is not. The deadlines are fixed and close, so the only real decision is when to start, and the better answer is now.