Does Making Tax Digital apply to you?
Making Tax Digital for Income Tax is being introduced in stages for sole traders and landlords, depending on their qualifying income.
| When the rules apply | Qualifying income threshold | Tax year HMRC uses |
|---|---|---|
| From 6 April 2026 — already in effect | More than £50,000 | 2024/25 |
| From 6 April 2027 | More than £30,000 | 2025/26 |
| From 6 April 2028 | More than £20,000 | 2026/27 |
Your qualifying income is your total gross income from self-employment and property combined, before expenses are deducted.
For example, £35,000 from self-employment and £18,000 from rental income would give you qualifying income of £53,000, even though neither income source exceeds £50,000 on its own.
Not sure which threshold applies to you? JDA can help you check your position and understand your next steps.
What do you need to do differently?
Making Tax Digital introduces a more regular approach to record-keeping and reporting. There are three main requirements:
1. Keep digital records
Record your self-employment and property income and expenses digitally, using software that works with Making Tax Digital.
Keeping your records up to date throughout the year helps make reporting more manageable.
2. Send quarterly updates
Use compatible software to send HMRC summaries every three months. Each update includes figures from the start of the tax year to the end of that update period.
These are summaries of your records, rather than four separate tax returns.
3. Submit your annual tax return
You’ll still need to finalise your figures, include any other reportable income and submit your annual tax return through compatible software.
The deadline is 31 January following the end of the tax year. For the 2026/27 tax year, that means 31 January 2028.
Your Making Tax Digital questions answered
Quarterly updates do not create a new quarterly tax payment requirement. They report your income and expenses to HMRC. Your existing tax payment obligations, including payments on account where applicable, still need to be met.
Potentially, yes. A spreadsheet can form part of your system when it works with suitable bridging software and meets HMRC’s digital record-keeping requirements. A spreadsheet on its own cannot submit your Making Tax Digital updates.
These Making Tax Digital for Income Tax rules apply to qualifying sole traders and landlords. They do not apply to a limited company’s Corporation Tax reporting. Separate Making Tax Digital rules already apply to VAT.
Speak with JDA about the support available. Some people may qualify for an exemption where it is not reasonable or practical for them to use digital systems, but this depends on their circumstances and HMRC’s rules.
HMRC will not apply penalty points for late quarterly updates during the 2026/27 tax year. However, the updates are still required, and you must send them before submitting your annual tax return. Late annual returns and late tax payments can still lead to penalties.
Get advice promptly. JDA can help you understand your position, identify what needs attention and discuss the steps needed to bring your reporting up to date.
