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Making Tax Digital for Income Tax Self Assessment starts in April 2026 for self-employed people and landlords whose gross income is above £50,000. It replaces the single annual return with quarterly digital summaries of income and expenses, sent to HMRC from compatible software, followed by a final declaration. Those with income between £30,000 and £50,000 join a year later in April 2027, and those between £20,000 and £30,000 in April 2028. There is no start date yet for anyone below £20,000.

None of this is new in principle. The VAT phase began in April 2019 and had swept in every VAT-registered business by April 2022. Income tax is the second phase, and the threshold is measured on combined turnover from self-employment and property, so a modest trade alongside a couple of rental properties can cross £50,000 even where neither would on its own.

The first MTD year is 2026/27, which began on 6 April 2026. Four update periods run from 6 April to 5 July, 6 July to 5 October, 6 October to 5 January and 6 January to 5 April, and each summary is due on the 7th of the month after its period ends, giving deadlines of 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027. The final declaration, which takes the place of the old Self Assessment return, is due by 31 January 2028. Penalties work on points, as they do for MTD VAT: 4 late quarterly updates trigger a £200 penalty, and each late one after that costs another £200. HMRC has said it will not apply points for late quarterly updates during 2026/27, though a late tax return still earns one.

You will need software HMRC recognises. FreeAgent comes free with NatWest and RBS business banking, QuickBooks starts at around £10/month, Xero and Sage sit at about £14/month, and FreshBooks is another option. A spreadsheet plus bridging software is cheaper and workable for very simple affairs. HMRC publishes the approved list, and it is worth choosing something cloud-based with a bank feed, plus landlord-specific features if you let property.

What you keep digitally matters as much as what you file. Each item of income and expenditure needs a date, an amount and a description, along with input and output VAT if you are registered. Receipts can be scanned into the software or kept on paper for 5 years. The digital link rule bans manual re-typing between your records and the submission, which is why an automated bank feed is worth setting up early, since it cuts errors and satisfies the rule at the same time.

Preparation is mostly bookkeeping. Start by estimating turnover from your 2024/25 accounts, since that is what decides whether April 2026 applies to you. Choose and learn your software at least 12 months ahead, digitise the records, set up bank feeds and settle on expense categories. File the 2025/26 Self Assessment return in the usual way by 31 January 2027, because it is the last pre-MTD one, while sending quarterly updates for 2026/27, the first of which was due on 7 August 2026. Budget between £600 and £1,500 for accountancy support in the first year, when the process is unfamiliar.