MTD began with VAT in 2019 and expanded in 2022. The next stage is Making Tax Digital for Income Tax. It starts for sole traders and landlords with qualifying income over £50,000 from 6 April 2026, extends to those over £30,000 from 6 April 2027, and the government has set out plans to legislate a further extension to those over £20,000 from April 2028. Qualifying income means gross self-employment and property income before expenses.
1) What is Making Tax Digital for Income Tax in a nutshell?
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It replaces the annual Self Assessment process for people in scope.
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You must keep digital records in compatible software.
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You send quarterly updates for each relevant income source.
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You complete a tax return within the software by 31 January each year.
Only the reporting method changes. The tax rules themselves do not.
2) Who does Making Tax Digital for Income Tax affect?
Anyone who currently uses Self Assessment and has qualifying income above the thresholds. That includes sole traders and landlords. If you have multiple sources, HMRC looks at the total qualifying income across them. If you are both a sole trader and a landlord, add the figures together to see if you are in scope.
3) What are the quarterly updates?
Four submissions per tax year that summarise income and expenses for each income source in scope. HMRC has aligned update periods to the tax year as follows:
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1 April to 30 June: due 7 August
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1 April to 30 September: due 7 November
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1 April to 31 December: due 7 February
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1 April to 31 March: due 7 May
These deadlines replace older “5th of the month” test dates. Your software will guide you.
4) What happened to End of Period Statements (EOPS)?
HMRC has removed the EOPS step from Making Tax Digital for Income Tax. You now submit quarterly updates and then complete the annual tax return in the software. This removal is reflected in HMRC’s developer guidance and legislation updates.
5) What is the digital tax return?
It is the annual return you complete within your MTD-compatible software by 31 January following the tax year. It finalises your position across all relevant income sources and applies any adjustments or reliefs. HMRC guidance now uses “tax return” for this step; “final declaration” refers only to the final step within that return.
6) Can an accountant or bookkeeper submit the updates and tax return?
Yes. Your agent can prepare and submit quarterly updates and the tax return through their linked software. You remain responsible for reviewing and digitally approving the tax return. If you prefer, your agent can also handle the sign-up steps for you.
7) When do I pay my tax and National Insurance under MTD?
Payment timings do not change. Balancing payments are still due by 31 January following the tax year. Payments on account continue in January and July where applicable.
8) How do I sign up for Making Tax Digital for Income Tax?
HMRC offers an online sign-up service. You will need compatible software and to sign up each income source if you have more than one. Voluntary sign-up is available before mandation if you want to get used to the process early.
9) Is Self Assessment ending because of Making Tax Digital for Income Tax?
No. Self Assessment continues for people outside the scope of Making Tax Digital for Income Tax. If you are within scope, your digital tax return in the software replaces the need to file a traditional Self Assessment return for those income sources.
10) What is the MTD for Income Tax beta programme?
HMRC is running a live beta ahead of mandation. It lets eligible taxpayers and agents use the service early, test the flow, and get used to quarterly submissions. Not everyone can join; there are exclusions set by HMRC.
11) Has Making Tax Digital for Income Tax been delayed?
The government has delayed and reshaped the programme in the past. The current position is start from April 2026 for those over £50,000 and April 2027 for those over £30,000. The Spring Statement 2025 announced plans for a £20,000 threshold from April 2028, subject to legislation.
12) Is there free software for Making Tax Digital for Income Tax?
HMRC maintains a list of software that works with the service. Some products are low-cost or free, and bridging options exist if you still use spreadsheets. Always check the official compatibility list and features.
13) Can I use spreadsheets?
You can, but you must link them digitally to bridging software to create submissions. Manual copy and paste breaks the digital links requirement and risks non-compliance. For most people, cloud accounting software is simpler and more robust.
14) What is the threshold for Making Tax Digital for Income Tax?
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Over £50,000 qualifying income: start 6 April 2026
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Over £30,000 qualifying income: start 6 April 2027
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Over £20,000 qualifying income: the government plans legislation to start April 2028
HMRC tests your gross income for these thresholds, not your profit.
15) How long must I keep records?
If you are self-employed, keep records for at least five years after the 31 January deadline for the relevant tax year. If you are not self-employed but file a return, HMRC’s general rule is at least 22 months after the end of the tax year. Under Making Tax Digital for Income Tax, records must be kept digitally.
16) Where can I learn more?
Start with HMRC’s official guidance on Making Tax Digital for Income Tax, the quarterly updates page and the eligibility checker. HMRC’s developer pages clarify terminology and confirm the removal of EOPS. If anything is unclear, ask us and we will translate the rules into plain English.
Final thoughts from The Accounts Centre
Making Tax Digital for Income Tax changes how you report, not how tax is calculated. The cleanest approach is to get set up early, pick compatible software, and build the habit of keeping records digitally. If you are above the thresholds for 2026 or 2027, do not leave it to the last minute.
If you want practical help choosing software, understanding quarterly updates, or mapping your first year under Making Tax Digital for Income Tax, get in touch and we will keep it simple.
