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Making Tax Digital for Income Tax: quarterly updates, handled
Since April 2026, many sole traders and landlords must keep digital records and send HMRC a summary every quarter. We check whether you are in scope, set up the software and file the updates for you.
In short
From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records and send quarterly updates to HMRC through compatible software. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. Quarterly updates are due on 7 August, 7 November, 7 February and 7 May.
Are you in scope?
What counts is your qualifying income: the gross income, before expenses, from self-employment and property added together. It is not your profit. A sole trader with £35,000 of turnover and £20,000 of rent has qualifying income of £55,000, so was in scope from April 2026, even if the profit is modest.
| From | Qualifying income over |
|---|---|
| 6 April 2026 | £50,000 |
| 6 April 2027 | £30,000 |
| 6 April 2028 | £20,000 |
For April 2026, HMRC tested qualifying income using the 2024/25 tax return. Partnerships and limited companies are not in Making Tax Digital for Income Tax. But a company director who also lets out property, or has self-employed income on the side, may be, on that personal income.
What changes in practice
- Records of income and expenses are kept digitally in HMRC-recognised software, not in a notebook or loose spreadsheet.
- A summary is sent to HMRC every quarter for each business and for property income.
- After the year ends, a final declaration replaces the old tax return, due by 31 January.
| Quarter (standard periods) | Update due |
|---|---|
| 6 April to 5 July | 7 August |
| 6 July to 5 October | 7 November |
| 6 October to 5 January | 7 February |
| 6 January to 5 April | 7 May |
HMRC has confirmed it will not issue penalty points for late quarterly updates in the first year, 2026/27. That is a soft landing, not an exemption: the updates are still required, and late payment penalties still apply.
What we do
- Confirm whether you are in scope now, or from 2027 or 2028, and whether any exemption applies.
- Choose and set up compatible software, such as Xero or FreeAgent, with bank feeds so records stay current. As a Xero bronze partner, we are ready to help you meet Making Tax Digital requirements using Xero.
- Review your records each quarter and submit the update on your behalf.
- Make the year-end adjustments and file the final declaration.
- Tell you, each quarter, roughly what tax is building up, so January holds no surprises.
Common questions
Questions we are often asked
No. It applies to individuals with self-employment or property income. Limited companies and partnerships are outside it for now. A company director with personal rental income or a side business may still be in scope on that income.
Turnover. Qualifying income is the gross income from self-employment and property combined, before any expenses are deducted.
No. Quarterly updates are short summaries of income and expenses. After the year ends, a final declaration is still needed by 31 January, and that is where the tax position is settled.
Submit it as soon as possible. HMRC is not issuing penalty points for late quarterly updates in 2026/27, but the updates are still required, and the final declaration cannot be completed until every quarter has been submitted.
Contact
Bring us last year's accounts and we'll tell you what we'd change.
An initial conversation takes half an hour and costs nothing. If we are not the right practice for you, we will say so.