Making Tax Digital For Income Tax

What is MTD for IT

From April 2026, MTD for IT will apply to sole trade businesses and landlords with a total business or property income above £50,000 per year. Sole traders and landlords earning above £30,000 will follow in April 2027. And, sole traders and landlords earning above £20,000 will follow in April 2028. This will mean a change to the way tax obligations are managed with HMRC.

While some sole traders registered for VAT will already be familiar with Making Tax Digital rules, others will need to get cloud-based accounting software in place so that they can comply with MTD for IT.

Requirements of MTD for Income Tax

Under MTD for Income Tax, sole trade businesses and landlords will need to keep and maintain digital records and use HMRC-recognised software to manage, track and send updates to HMRC. Sole traders and landlords earning above £50,000 will need to comply with MTD for IT rules from April 2026. Sole traders and landlords earning above £30,000 will follow in April 2027. And, sole traders and landlords earning above £20,000 will follow in April 2028.

From 6 April 2026, you’ll need to submit quarterly updates to HMRC, as well as a final declaration that includes all other taxable income by 31 January every year.

Here’s a quick look at how these changes compare to current rules:

Before April 2026:

• 1 annual submission
• Paper filings by 31st Oct
• Online filings by 31st Jan
• Fine to keep paper records

After April 2026:

• 4 quarterly submissions per business
• 1 annual final declaration submission per individual
• Filing via MTD-compliant software
• Keeping digital records

The benefits of MTD for IT for the self-employed

If the idea of a digital tax submission process feels overwhelming, rest assured that there are plenty of other benefits. Already, people who fully-embraced cloud-based software for MTD for VAT have experienced benefits such as time savings, increased VAT confidence, greater insight and financial control.

Here are some additional benefits of the MTD for IT system:

1. Improved accuracy: When software takes care of the numbers, there are fewer chances for human error. For example – automating your data entry, so that bookkeeping records automatically populate your quarterly updates means you don't need to manually type them into your returns.
2. Better tax planning: Exery time you submit a quarterly udpate, you get a clearer view on what your total tax liability will be. This helps with tax planning and cash flow management, because you can prepare for your bill ahead of time.
3. More manageable bookkeeping: While you'll need to submit more updates to HMRC, those updates contain less information. This means that you can turn your bookkeeping into a bitesize monthly or quarterly task – instead of an annual rush.

But, you don’t need to wait until the HMRC requirements for IT come into place to experience these benefits. Cloud-based accounting software is the ideal tool for streamlining tax compliance for self-employed people. By adopting it now, you can get more visibility on your tax position and cash flow, turn annual bookkeeping into a bitesize task, and reduce the chance of human error in your submissions.

How do I prepare for MTD for Income Tax?

Make sure you have HMRC-recognised software in place, and you’re signed up to MTD for IT before 6 April 2026. Check out our MTD deadlines if you need to brush up on key Making Tax Digital dates for the self-employed.

Sign up early if you can, or talk to your accountant or bookkeeper about signing up for MTD for Income Tax. The more time you spend getting used to new digital tools, the easier you’ll find the transition to Making Tax Digital.

When is the deadline for MTD for IT?

All self-employed people and landlords with a total income (from business or property) above £50,000 will need to follow the new IT tax filing process from 6 April 2026. Sole traders and landlords earning above £30,000 will follow in April 2027, and those earning more than £20,000 will follow MTD for IT rules from April 2028.Sole traders earning below the threshold can continue to use the old HMRC system for filing their returns. If you own multiple businesses, the income earned from all of them contributes to the £50,000 threshold. Our FAQs for landlords are a great resource if you earn property income.

What do I need to submit for MTD for IT?

From 6 April 2026, self-employed people and landlords earning above £50,000 will need to keep digital records of income and expenditure. There are two parts you’ll need to submit for MTD for IT:

1. Quarterly updates. These should include all business income and expenditure. Quarterly updates are cumulative, so you can include any corrections to past information throughout the year.
2. Final Declaration. This is where you'll need to share details of all other taxible income, including investments and savings interest.

Find out more about what you need to submit for MTD for IT.

Can the self-employed opt-out of MTD for IT?

No. If you’re above the MTD for IT threshold of £50,000, Making Tax Digital is not optional from 2026. However, people that are digitally exempt do not need to follow MTD rules. This could include people who are elderly, have a disability, or live in a remote location. Foster carers and people who cannot get a National Insurance number are also exempt from MTD for Income Tax.

You can request to be made exempt from MTD for IT on the gov.uk website.

How do I sign up for Making Tax Digital for IT as a self-employed person?

Signing up for MTD for IT requires that you have HMRC-recognised software in place first. That’s because you need to sign up to MTD for IT through your cloud-based software, instead of on the HMRC website. You’ll also need your business name, business start date, email address, National Insurance number, accounting period, and accounting type to apply. Read HMRC’s guidance on signing up for more information.

MTD software for the self-employed

Using HMRC-recognised software will enable sole traders and the self-employed to keep digital records of income and expenses and submit their quarterly updates and annual submissions directly from the platform.

The self-employed should also look for software with additional features that reduce the administrative burden of digital record keeping, like invoicing and expense capture.

Explore our MTD for IT resource hub

We’ve created a Making Tax Digital for Income Tax resource hub to help you prepare for the new legislation. Explore our expert guides, articles and FAQs outlining everything you need to know about MTD for IT, from quarterly update obligations to how self-employed tax returns are changing.

MTD for IT resources