Making Tax Digital Deadlines: 2026, 2027, 2028

29 September 2026

Making Tax Digital for Income Tax is already under way, and the timeline is tighter than many sole traders and landlords realise. Since 6 April 2026, the first wave of taxpayers has been required to keep digital records and submit quarterly updates to HMRC alongside the annual Self-Assessment system. This guide sets out exactly who is affected, when each deadline applies and what you need to do to be ready.

MTD for Income Tax: Who Is Affected and When

The rollout of Making Tax Digital for Income Tax is being phased in over three years based on gross qualifying income. The key deadlines, which you can also check against HMRC's eligibility guidance, are:

Sole traders and landlords with gross qualifying income above £50,000 — mandatory from 6 April 2026 — assessed using the 2024/25 Self-Assessment return
Sole traders and landlords with gross qualifying income above £30,000 — mandatory from 6 April 2027 — assessed using the 2025/26 Self-Assessment return
Sole traders and landlords with gross qualifying income above £20,000 — mandatory from 6 April 2028 — assessed using the 2026/27 Self-Assessment return

The income threshold refers to your gross qualifying income before expenses, not your taxable profit. Gross qualifying income includes income from self-employment and property income combined. So, if you earn £30,000 from your sole trader business and £25,000 in rental income, your combined qualifying income is £55,000 and you are in scope from April 2026.

What Is the MTD Sole Trader Threshold?

For sole traders, the threshold is based on your gross trading income before deducting any business expenses. Whether you are in scope for each phase is determined by the specific Self-Assessment return from two years prior: HMRC will use your 2024 to 2025 return to assess April 2026 mandation, your 2025 to 2026 return for April 2027, and your 2026 to 2027 return for April 2028.

If your income fluctuates year to year, you may move in and out of the mandatory regime, though you can choose to remain within it voluntarily once enrolled.

What Happens Under MTD for Income Tax?

Once you are within the MTD for Income Tax regime, the way you report your income to HMRC changes fundamentally. Instead of completing a single Self-Assessment return after the end of the tax year, you will need to:

Keep digital records of all business income and expenses using MTD compatible software.
Submit quarterly updates to HMRC four times a year, each covering your income and expenditure for the tax year to date.
Submit a Self-Assessment tax return at the end of the tax year to confirm your total figures, claim reliefs and settle your tax liability.

The quarterly updates are not tax calculations, and they do not replace your Self-Assessment tax return. They are a short digital summary of your income and expenses sent directly to HMRC through your software. The annual Self-Assessment tax return deadline of 31 January remains unchanged.

What Are the MTD Quarterly Update Deadlines?

Each update covers the tax year to date, so the period reported grows with each submission. HMRC's quarterly update guidance sets out the four standard periods and their deadlines:

Quarter 1 — period 6 April to 5 July — submission deadline 7 August
Quarter 2 — period 6 April to 5 October — submission deadline 7 November
Quarter 3 — period 6 April to 5 January — submission deadline 7 February
Quarter 4 — period 6 April to 5 April — submission deadline 7 May in the following tax year

If your accounting period runs from 1 April to 31 March, you can choose calendar update periods instead — 1 April to 30 June, 1 April to 30 September, 1 April to 31 December and 1 April to 31 March. The submission deadlines are the same four dates regardless of which period type you use.

The annual Self-Assessment tax return, which sits alongside the quarterly update process rather than replacing it, must be submitted by 31 January following the end of the tax year, in line with the existing deadline.

What Software Do You Need for MTD for Income Tax?

You will need software that is recognised by HMRC as compatible with MTD for Income Tax. This means software that can keep digital records and submit quarterly updates directly to HMRC via its API. The most widely used options include cloud accounting platforms such as Xero and QuickBooks, as well as dedicated products designed specifically for sole traders and landlords.

Spreadsheets are acceptable for keeping your digital records. What they cannot do on their own is submit updates to HMRC. If you want to continue using spreadsheets, you will need to pair them with bridging software that handles the submission directly to HMRC. Bridging software is expressly permitted by HMRC for this purpose, provided all links in the process are digital rather than manually retyped. For most people, moving to a full cloud accounting platform is the most practical and reliable route to compliance. At Affinity Associates Isaacs & Co, we help our clients identify the right approach for their circumstances.

What If You Are Below the Threshold?

If your gross qualifying income is below the relevant threshold for your mandation date, you are not yet required to comply with MTD for Income Tax. You will continue to file a standard Self-Assessment tax return for the time being. However, the April 2028 threshold of £20,000 will bring the majority of people currently filing Self-Assessment into the regime. Voluntary sign up is also available for those who want to get ahead of the change.

What Are the Penalties for Not Complying?

HMRC operates a points-based penalty system for late or missing submissions under MTD for Income Tax. Importantly, for the first cohort entering the regime in April 2026, HMRC has confirmed that no penalty points will be issued for late quarterly updates during the 2026/27 tax year. This gives new entrants time to adjust to the new system without the immediate risk of financial penalties.

From the second year onwards, the standard system applies. Each missed quarterly update earns a penalty point. Once a taxpayer accumulates four points within a set period, a financial penalty of £200 is charged. Points expire after a period of good compliance. It is important to note that penalties for late tax returns and late payment of tax still apply from day one — the first-year easement covers quarterly updates only.

How Affinity Associates Isaacs & Co Can Help

MTD for Income Tax represents a significant change to the way millions of people manage their tax affairs. At Affinity Associates Isaacs & Co, we are already working with clients to prepare for these changes, covering everything from assessing whether you are in scope, selecting and setting up the right software, establishing good record keeping habits and managing quarterly updates on your behalf. If you would like to understand how MTD for Income Tax affects you, get in touch with us today.

Frequently Asked Questions

What is the Making Tax Digital deadline for 2026?

Since 6 April 2026, sole traders and landlords with gross qualifying income above £50,000 have been required to comply with Making Tax Digital for Income Tax. Whether you are in scope is determined by your 2024 to 2025 Self-Assessment return. You need to keep digital records and submit quarterly updates to HMRC using compatible software. Your annual Self-Assessment tax return deadline of 31 January remains unchanged.

What is the MTD threshold for 2027 and 2028?

From April 2027, the threshold drops to £30,000 of gross qualifying income, assessed using the 2025 to 2026 Self-Assessment return. From April 2028, it reduces to £20,000, assessed using the 2026 to 2027 return. This will bring the majority of people currently filing Self-Assessment under the MTD for Income Tax regime.

Does the £50,000 threshold apply to profit or turnover?

The threshold applies to gross qualifying income before expenses, not profit. It includes both self-employment turnover and gross rental income combined. If your combined total exceeds the relevant threshold, you will be in scope for MTD for Income Tax from the corresponding start date regardless of what your actual profit figure is.

What software do I need for MTD for Income Tax?

You need software that can submit quarterly updates directly to HMRC via its API. Cloud accounting platforms such as Xero and QuickBooks are widely used. Spreadsheets are acceptable for keeping records but cannot submit to HMRC on their own. Bridging software that connects your spreadsheet records to HMRC's systems is expressly permitted, provided all links in the process are digital rather than manually retyped.

What happens if I miss a quarterly MTD update?

For the first cohort entering MTD in April 2026, HMRC has confirmed no penalty points will be issued for late quarterly updates during 2026/27. From 2027/28, each missed update earns a penalty point and once four points accumulate within a set period a £200 penalty is triggered. Note that penalties for late tax returns and late payment of tax still apply from the outset — the first-year easement covers quarterly updates only.