Making Tax Digital for Income Tax: Start Dates and Records

Who needs Making Tax Digital for Income Tax, and when?

Making Tax Digital for Income Tax changes how eligible sole traders and landlords keep records and report within Self Assessment. Start with qualifying income before expenses, combining the relevant self-employment and property income reported on the tax return, then check exemptions. The threshold is income, not profit, and the source tax year matters.

These are strictly over thresholds: an amount exactly equal to a threshold does not exceed it. For example, £35,000 of qualifying income on the 2025/26 return exceeds that phase's £30,000 threshold and normally means a 6 April 2027 start, unless an exemption applies. Being below one phase's threshold does not rule out a later start. If you should already have started in April 2026, check HMRC's sign-up instructions now. See HMRC's eligibility and start-date guidance.

Digital records, quarterly updates and the annual tax return

Use compatible software to maintain the required digital records and send quarterly updates for the relevant businesses. Updates summarise income and expenses; they are not four final tax returns or four new tax-payment dates. After the year end, review and correct the business figures, add other income and claims, and submit the annual tax return through compatible software. The usual 31 January return and payment deadlines continue to apply. HMRC's current process guide explains how this fits within Self Assessment.

Each quarterly update contains cumulative income and expense totals from the start of the tax year to the end of the update period. These updates are not separate three-month totals.

The optional calendar basis is also cumulative, beginning on 1 April: updates run to 30 June, 30 September, 31 December and 31 March, with the same submission deadlines. Select the reporting basis for each income source in your software before the first update; it cannot be changed for that tax year after an update is sent. Check HMRC's quarterly-update guidance and your software's reporting dates.

Check exemptions before signing up

Partnerships are not currently within these mandated phases. Other automatic or application-based exemptions exist, including digital exclusion and particular tax-return circumstances. Some are temporary. For example, use of the SA109 residence pages on the 2024/25 return can give an automatic exemption for 2026/27; later years and changes in circumstances need checking. Living abroad does not create a universal permanent exemption.

Check HMRC's current exemption guidance for the relevant year, and apply where required. Exemption from MTD does not remove the obligation to report income and gains through the appropriate Self Assessment return.

Prepare a workable bookkeeping process

• List each trade and property business, and reconcile qualifying income to the relevant tax return.
• Check whether the software supports your actual tax-return needs, reporting businesses and agent access.
• Agree who records transactions, reconciles bank and platform statements, checks categories and submits updates.
• Retain supporting receipts, letting-agent statements and evidence for ownership splits and finance costs.
• Plan a year-end review of adjustments, other income, losses and claims before approving the annual return.

For landlords, separate private and property transactions and establish the correct joint-ownership allocations. For sole traders using marketplaces, reconcile sales, platform deductions and bank receipts rather than treating the bank deposit as the only sales record.

Accounting support and software are separate decisions

Ask Accusolve to review the bookkeeping and tax work you need, the available records, software choice and proposed responsibilities. The agreed scope should state whether setup, record checks, quarterly updates and the annual return are included, who approves filings, and how the quote is calculated. This guide does not promise a particular package price, free review or platform integration.

An invoicing product is not automatically a complete MTD Income Tax solution. Verify compatible software against HMRC's software finder and the functions needed for your circumstances. Do not assume that the separate Accusolve invoicing application can submit quarterly updates or an annual return without confirmation of its current supported capabilities.

Questions about MTD Income Tax

Related services

• MTD software information and availability
• Bookkeeping support
• Self Assessment tax returns
• Non-resident landlord tax