Last checked October 2026 · by the PaySorted team
What it is
Making Tax Digital (MTD) for Income Tax means keeping your business records digitally and sending HMRC a summary every quarter using compatible software, instead of one paper or online return a year.
Who it applies to, and when
It applies to self-employed people and landlords, based on their qualifying income: total turnover from self-employment and property, before expenses.
| From | If your qualifying income is over | Based on your tax return for |
|---|---|---|
| 6 April 2026 | £50,000 | 2024 to 2025 |
| 6 April 2027 | £30,000 | 2025 to 2026 |
| 6 April 2028 | £20,000 | 2026 to 2027 |
It's turnover, not profit. A plumber who invoices £55,000 a year and makes £30,000 profit is in from April 2026. Limited companies aren't covered, and partnerships aren't included yet.
What you need to do
- Keep digital records of every sale and business expense, in MTD-compatible software or a spreadsheet linked to it.
- Send a quarterly update to HMRC from that software, four times a year.
- Finish the year by sending your tax return (the "final declaration") through MTD software by 31 January, adding any other income and claiming allowances. It does the job of the old Self Assessment return, and the tax is still due on 31 January.
Quarterly deadlines
| Quarter | Covers | Update due |
|---|---|---|
| 1 | 6 April to 5 July | 7 August |
| 2 | 6 July to 5 October | 7 November |
| 3 | 6 October to 5 January | 7 February |
| 4 | 6 January to 5 April | 7 May |
Each update is a running total for the year so far. You can choose calendar quarters (ending 30 June, 30 September and so on) instead. HMRC has said it won't charge penalties for late quarterly updates in the 2026 to 2027 tax year only, for people who join that year. Check GOV.UK for the current rules.
What it means for trades
- Receipts: snap them as you go rather than keeping a carrier bag for your accountant.
- CIS: keep your payment and deduction statements, as the tax already taken counts towards your bill.
- Invoices: if they're digital from the start, there's nothing to type up each quarter.
- Your accountant can send the updates for you. Most will want your records in Xero, QuickBooks or similar.
Where PaySorted fits
PaySorted isn't MTD filing software. It's where your invoices and payments start: every one is a digital record, and they sync automatically to Xero, QuickBooks, FreeAgent or Sage, which file your quarterly updates. Your accountant can also log in free to see your figures.
General information based on HMRC guidance (checked October 2026), not tax advice. Check GOV.UK or speak to your accountant about your own situation.
Common questions
Do I need Making Tax Digital as a sole trader?
Yes, if your qualifying income (turnover from self-employment and property, before expenses) is over £50,000 from April 2026, over £30,000 from April 2027 or over £20,000 from April 2028.
When are MTD quarterly updates due?
7 August, 7 November, 7 February and 7 May, for the quarters ending 5 July, 5 October, 5 January and 5 April.
Does Making Tax Digital apply to limited companies?
No. MTD for Income Tax applies to self-employed people and landlords. Limited companies already use MTD for VAT if they're VAT registered.