Who it applies to
It applies to sole traders and landlords based on their qualifying income: self-employed turnover plus rental income, before any costs. Wages, pensions and dividends don’t count.
| Start date | Qualifying income over | Based on the tax year |
|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 |
| 6 April 2027 | £30,000 | 2025/26 |
| 6 April 2028 | £20,000 | 2026/27 |
If you own a property jointly, only your share of the rent counts. Partnerships aren’t included yet.
What changes
- Digital records: you keep your income and expenses in software that works with Making Tax Digital, such as Xero.
- Quarterly updates: four times a year you send HMRC a summary of your income and expenses.
- Final declaration: after the tax year you confirm your figures and claim any reliefs. This replaces the tax return, and the deadline is still 31 January.
Quarterly deadlines
| Quarter to | Update due by |
|---|---|
| 5 July | 7 August |
| 5 October | 7 November |
| 5 January | 7 February |
| 5 April | 7 May |
Late updates and returns build up penalty points, and a penalty is charged once you reach the limit, so it pays to stay on top of them.
What to do now
- Check your qualifying income for the tax year that sets your start date.
- Move your records into software. Spreadsheets only work with extra bridging software.
- Open a separate bank account for the business or the property if you haven’t already, so the bank feed does most of the work.
- Decide who sends the updates. Most of our clients let us do it, so they only need to keep their receipts up to date.
Common questions
Does Making Tax Digital apply if I also have a job?
Only your self-employed and rental income count towards the limit, not your wages. If those add up to more than the limit before costs, it applies.
Can I keep using spreadsheets?
Only with bridging software that sends the figures to HMRC. Most people find accounting software like Xero simpler.
Do I still need to do a tax return?
The final declaration replaces it, and it’s due by 31 January as before.
This guide is general information, correct as of November 2026. Rules change and every situation is different, so speak to us before acting on it.