MTD for Income Tax: The April 2026 Start Date Explained
Making Tax Digital for Income Tax (MTD ITSA) is one of the biggest changes to UK tax administration in a generation. If you are a sole trader or landlord, you need to know when it applies to you — and what you need to do before the deadline arrives.
Making Tax Digital for Income Tax becomes mandatory from 6 April 2026 for sole traders and landlords whose total annual income from self-employment and property exceeds £50,000. From that date, you must use HMRC-approved software to keep digital records and submit quarterly updates instead of filing a single annual Self Assessment return.
Key takeaways
- MTD for Income Tax is mandatory from 6 April 2026 for qualifying sole traders and landlords
- The income threshold is total annual income from self-employment and property over £50,000
- A second phase begins 6 April 2027 for those with lower qualifying income — check GOV.UK for the exact threshold
- You must use HMRC-compatible software from day one
- Quarterly update penalties are waived for the first year (2026 to 2027), but tax return and payment penalties still apply
Why April 2026?
HMRC has been planning Making Tax Digital for Income Tax for several years, with the April 2026 date confirmed after earlier delays. The original intent was to reduce errors in Self Assessment by moving to more frequent, digital reporting — catching mistakes in near real time rather than once a year.
For HMRC, quarterly reporting means more accurate tax records and faster identification of underpayments or overpayments. For taxpayers, it means spreading the record-keeping burden across the year rather than scrambling to gather 12 months of records in January.
Who must comply from 6 April 2026?
From 6 April 2026, you must use Making Tax Digital for Income Tax if all of the following apply:
- You are a sole trader and/or receive income from UK property
- Your total annual income from self-employment and property combined is over £50,000
- You are registered for Self Assessment
- You have submitted a Self Assessment tax return in the last two years
For example, if you earn £35,000 from self-employment and £20,000 from rental income, your combined qualifying income is £55,000 — you would be required to use MTD ITSA from April 2026.
What happens in 2027?
A second phase of MTD ITSA begins on 6 April 2027. This extends the requirement to sole traders and landlords with lower qualifying income — below the £50,000 threshold but above a second, lower threshold. HMRC has confirmed a 2027 start for this cohort; check GOV.UK for the current threshold figure, as it may be updated before the implementation date.
If you are just below the £50,000 threshold today, it is worth monitoring your income and checking whether the 2027 rules will apply to you.
What changes under MTD ITSA?
Instead of filing one annual Self Assessment return each January, MTD ITSA introduces a different cycle.
What digital records do I need to keep?
You must keep your financial records in HMRC-compatible software throughout the year. Spreadsheets alone are not sufficient unless you use bridging software that connects them to HMRC's systems. Records must be kept digitally from the start of the period covered by your first quarterly update.
How many quarterly updates do I need to submit?
Under MTD ITSA, you submit four quarterly updates per year, covering each quarter of your accounting period. Each update summarises your income and expenses for that quarter. You submit these using your MTD-compatible software — not through the HMRC website directly.
The updates are not tax returns: they are progress reports. You are not paying tax at each quarter; you are simply telling HMRC what your income and expenses look like so far.
End of period statement and final declaration
After the four quarterly updates, you complete an end of period statement confirming the figures are correct, then a final declaration (replacing the traditional Self Assessment return) which pulls everything together including any other income sources. The final declaration and any tax owed are still due by 31 January following the end of the tax year.
What about penalties in the first year?
HMRC has confirmed a soft-landing approach for the 2026 to 2027 tax year. If you are required to start in April 2026, HMRC will not apply penalty points for late quarterly updates during that first year. This gives businesses time to adjust to the new rhythm.
However, the grace period does not cover everything:
- Late tax return penalties still apply — the final declaration must be submitted on time
- Late payment penalties still apply — if your tax bill is not paid by the deadline, interest and penalties accrue as normal
Can I sign up early?
Yes. HMRC allows voluntary sign-up before the mandatory date. If your income is under £50,000 today but you want to get used to the new process ahead of a future rollout, you can sign up early. Some accountants recommend this approach to iron out any software or process issues before compliance becomes compulsory.
To understand the full scope of what MTD ITSA involves before signing up, read our guide to Making Tax Digital for Income Tax.
What software do I need?
You must use HMRC-approved MTD ITSA software. HMRC maintains a list of compatible software products on their website. The software must be able to:
- Receive and store digital records
- Calculate your income and expenses per quarter
- Submit quarterly updates directly to HMRC
- Generate an end of period statement and final declaration
Steps to prepare for MTD ITSA
- Confirm your qualifying income — add up all income from self-employment and property to check whether you are over £50,000
- Choose compatible software — check HMRC's approved software list and ensure your chosen product supports MTD ITSA
- Start keeping digital records — begin tracking income and expenses digitally as early as possible, even before the mandatory date
- Sign up through HMRC — you will need to formally sign up for MTD ITSA before your first quarterly update is due
- Speak to your accountant — if you use an agent, they can sign you up on your behalf and manage your quarterly submissions
How does this affect my Self Assessment return?
MTD ITSA replaces the traditional Self Assessment return for income covered by the scheme (self-employment and property income). You will still need to account for other income sources — such as dividends, PAYE income, or savings interest — through the final declaration process.
Understanding the broader Self Assessment deadlines that remain in place will help you manage your overall tax calendar alongside the new MTD ITSA requirements.
Will partnerships be included?
MTD ITSA initially covers sole traders and landlords. General partnerships are expected to follow in a later phase, though HMRC has not yet announced a confirmed start date for partnerships as of June 2026. Check GOV.UK for the latest partnership guidance.
Frequently Asked Questions
When does MTD for Income Tax start?
MTD for Income Tax becomes mandatory from 6 April 2026 for sole traders and landlords with total annual income from self-employment and property over £50,000. A second phase begins 6 April 2027 for those with lower qualifying income. Check GOV.UK for the current thresholds.
Do I have to use MTD ITSA if I earn over £50,000?
Yes, if your combined annual income from self-employment and property exceeds £50,000, you must use Making Tax Digital for Income Tax from 6 April 2026. You must keep digital records and submit four quarterly updates per year using HMRC-compatible software.
Are there penalties if I miss a quarterly update in 2026?
For the first year (2026 to 2027), HMRC will not apply penalty points for late quarterly updates. However, penalties still apply for late final declarations (the replacement for the Self Assessment return) and for late payment of any tax owed.
Can I sign up for MTD ITSA before it becomes compulsory?
Yes. Voluntary sign-up is open now. Signing up early can help you get used to the software and quarterly reporting rhythm before the mandatory deadline. Speak to your accountant or sign up directly through your Government Gateway account.
What if my income drops below £50,000?
If your qualifying income falls below the threshold, you may be able to exit MTD ITSA. HMRC has published guidance on how to apply for an exemption or exit the scheme. Check GOV.UK for the current rules, as they may be updated closer to the implementation date.
Summary
The MTD for Income Tax start date of 6 April 2026 is confirmed and approaching. If you are a sole trader or landlord with income over £50,000 from self-employment and property, you need to choose compatible software, start keeping digital records, and formally sign up before your first quarterly update is due. The first year comes with a grace period on quarterly update penalties — but not on your final tax bill or return. Getting prepared now will make the transition far smoother.