Making Tax Digital
for Income Tax
Making Tax Digital for Income Tax replaces the annual Self Assessment return for sole traders and landlords. You keep your records digitally through the year, send four quarterly updates from compatible software, and make a final declaration after the year end. It applies by qualifying income — over £50,000 from April 2026, over £30,000 from April 2027, and over £20,000 from April 2028.
The thresholds and dates
| Qualifying income | Mandatory from | |
|---|---|---|
| over £50,000 | 6 April 2026 | In force now. |
| over £30,000 | 6 April 2027 | The next band. |
| over £20,000 | 6 April 2028 | The widest band. |
What counts as qualifying income
Counts towards it
- Income from self-employment (a sole trade), before expenses
- Income from property you let in your own name, before expenses
Does not count
- Salary taxed under PAYE
- Dividends
- Pension income
- Income earned inside a limited company — that is the company's, and companies are outside MTD for Income Tax entirely
It is turnover, not profit, and it is added across all your sole trades and property together. Someone with £18,000 of trade income and £14,000 of rent has £32,000 of qualifying income, not two figures under the threshold.
What actually changes
Digital records, kept as you go
Your income and expenses have to be recorded digitally rather than added up from a shoebox once a year. That is the part that changes day to day, and it is the part Revenue is built for.
Quarterly updates
Four updates a year per business, sent to HMRC from compatible software. They are running totals of income and expenses, not four mini tax returns, and no tax is due on them.
A final declaration
After the fourth quarter you finalise the year — adjustments, reliefs, anything outside the business — and declare it. This replaces the Self Assessment return you file today.
One set of books per business
HMRC treats a sole trade and a property business as separate businesses with separate obligations, even for the same person. Two income sources means two sets of quarterly updates.
How it lands in your trade
The rules are the same for everyone, but the way turnover, materials and vehicle costs behave is not. These go through what changes for each.
sole traders
Anyone trading in their own name rather than through a limited company — a trade, a freelance practice, a shop, a consultancy.
landlords
Anyone letting property in their own name and filing an SA105 page — one flat or a portfolio, furnished or not.
plumbers
Self-employed plumbers and heating engineers trading in their own name, including those working under CIS on construction sites.
electricians
Self-employed electricians trading in their own name, whether working direct for customers or as a subcontractor under CIS.
taxi drivers
Self-employed taxi, private hire and ride-hailing drivers, including those working through booking platforms.
hairdressers
Self-employed hairdressers, barbers and beauty therapists — renting a chair, working mobile, or running a salon in their own name.
builders
Self-employed builders, groundworkers, roofers, bricklayers and general construction trades, including CIS subcontractors.
driving instructors
Approved driving instructors working for themselves, whether independent or under a franchise.
freelancers
Freelancers, consultants, designers, writers and contractors invoicing in their own name rather than through a company.
online sellers
People trading through eBay, Etsy, Amazon, Vinted or their own shop in their own name — as distinct from occasionally selling personal belongings, which is not trading.
photographers
Self-employed photographers and videographers — weddings, portraits, commercial and event work — trading in their own name.
gardeners
Self-employed gardeners, landscapers and grounds maintenance workers trading in their own name.
cleaners
Self-employed domestic and commercial cleaners working in their own name, including those with a few staff or subcontractors.
personal trainers
Self-employed personal trainers, fitness instructors and coaches working in their own name, in a gym, outdoors or online.
painters and decorators
Self-employed painters and decorators trading in their own name, working for householders or as subcontractors on site.
childminders
Registered childminders working from their own home in their own name.
Being straight with you
To be straight about where Revenue is today: it keeps your books on a real double-entry ledger and prepares the figures behind an SA return, but it does not yet send quarterly MTD for Income Tax updates to HMRC — that is in development, and our HMRC production approval is still in progress. If you are mandated now, keep your records in Revenue and file through an HMRC-recognised route until we can tell you otherwise. RepBud is designed to assist, not replace, your professional judgement.
Common questions
What is Making Tax Digital for Income Tax?
It is HMRC's replacement for the annual Self Assessment return for sole traders and landlords. Instead of one return after the year end, you keep your records digitally through the year, send four quarterly updates from compatible software, and make a final declaration at the end. It is being phased in by income band from April 2026.
Who has to use it, and when?
Sole traders and landlords, phased by qualifying income: over £50,000 from 6 April 2026, over £30,000 from 6 April 2027, and over £20,000 from 6 April 2028. HMRC works out which band you are in from a return you have already filed, and writes to tell you.
What counts as qualifying income?
Turnover from self-employment and from property you let in your own name, added together, before any expenses. Salary taxed under PAYE, dividends and pension income do not count. Income earned inside a limited company is outside the regime entirely, because companies pay Corporation Tax.
Is a quarterly update a tax return?
No. It is a running total of your business income and expenses, sent from your software. There is no tax calculation attached and nothing to pay. The dates your tax is actually due have not changed.
What if I have both a business and a rental property?
The two incomes add together for the threshold test, but HMRC treats them as separate businesses with their own quarterly obligations. One person doing both keeps two sets of books and sends two sets of updates, then makes a single final declaration covering everything.
Could the dates move again?
They have before — this regime was originally set for 2018 and was deferred four times before the current phasing. What is different now is that the £50,000 band actually commenced on 6 April 2026, so the programme is live rather than pending. We date every figure on this page so you can see how current it is.
Does RepBud Revenue send my quarterly updates?
Not yet. Revenue keeps your books on a real double-entry ledger and prepares the figures behind a Self Assessment return, and quarterly submission to HMRC is in development while our production approval is in progress. If you are mandated now, keep your records in Revenue and file through an HMRC-recognised route until we can tell you otherwise.
Thresholds and dates are HMRC’s, checked August 2026. This is general information about the regime, not tax advice for your circumstances.