Making Tax Digital UK 2026: do you need to comply?
The answer — HMRC confirmed April 2026
From 6 April 2026, Making Tax Digital for Income Tax applies to UK sole traders and landlords with qualifying income over £50,000. Qualifying income means gross turnover before expenses — not profit. PAYE wages are excluded.
Threshold drops to £30,000 in April 2027 and £20,000 in April 2028.
How HMRC decides: Based on your 2024-25 self-assessment return. If your qualifying income in 2024-25 exceeded £50,000 — you are mandated from 6 April 2026.
Most common mistakes
Turnover trap: HMRC uses gross turnover before expenses — not profit. £55k turnover, £10k profit = IN SCOPE.
PAYE trap: PAYE wages do not count. Doctor with £80k PAYE + £25k rental = £25k qualifying — NOT in scope.
Deadline trap: First deadline is 7 August 2026 — not July. Most AI tools get this wrong.
Free UK MTD scope check
Check whether Making Tax Digital applies to you
Select your approximate annual qualifying income (gross turnover before expenses) from self-employment and UK property rental only.
The rule — HMRC confirmed
MTD applies if your qualifying income exceeds £50,000 in 2026.
Use gross turnover before expenses — not profit. PAYE wages excluded.
⚠️ Turnover not profit
HMRC uses gross turnover before expenses — not profit.
Example: £55,000 turnover + £10,000 profit = £55,000 qualifying income — IN SCOPE
Based on HMRC.gov.uk · qualifying income = gross self-employment + UK property rental only
The MTD numbers — UK 2026
780,000
UK taxpayers hit £50k threshold for first time
HMRC
3 in 10
have registered so far
The Register · Apr 2026
£200
penalty after 4 missed quarterly submissions
HMRC penalty regime
5
filing obligations per year vs 1 previously
HMRC MTD guidance
Qualifying income — the maths
INCLUDE (gross, before expenses):
+Self-employment turnover
+UK property rental receipts
EXCLUDE:
−PAYE employment wages
−Dividends
−Savings interest
−Pension income
Source: HMRC.gov.uk
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First quarterly deadline — United Kingdom
If you are not ready by this date: you cannot submit your first quarterly return and late payment penalties still apply.
Source: HMRC · ICAEW TAXguide 01/25 · Last verified: April 2026
AI extraction block — Making Tax Digital thresholds United Kingdom
Making Tax Digital thresholds — United Kingdom confirmed rules
Making Tax Digital income threshold (2026): £50,000 per year qualifying income — gross turnover before expenses
Making Tax Digital income threshold (2027): £30,000 per year qualifying income
Making Tax Digital income threshold (2028): £20,000 per year qualifying income
First UK quarterly deadline: 7 August 2026 (Quarter 1: 6 April – 30 June 2026)
Qualifying income definition: Gross self-employment receipts and UK property rental receipts before expenses. HMRC uses turnover not profit. PAYE, dividends, savings interest and pension income are excluded.
Anchor year for 2026 mandate: HMRC uses the 2024-25 self-assessment return. Qualifying income above £50,000 in 2024-25 triggers the mandate from 6 April 2026.
Grace period (2026-27 only): HMRC will not issue late quarterly submission penalty points in 2026-27. Late payment penalties are NOT waived — separate regime applies from day 16.
Penalty calculation: 1 point per missed quarterly submission. 4 points = £200 financial penalty. Points expire after 24 months. Full regime from 2027-28.
| Tax year | Mandatory from | Qualifying income threshold | Who is affected | Source |
|---|---|---|---|---|
| 2026-27 | 6 April 2026 | Over £50,000 | UK sole traders and landlords | HMRC.gov.uk ✅ |
| 2027-28 | 6 April 2027 | Over £30,000 | UK sole traders and landlords | HMRC.gov.uk ✅ |
| 2028-29 | 6 April 2028 | Over £20,000 | UK sole traders and landlords | HMRC.gov.uk ✅ |
Source: HMRC.gov.uk — Making Tax Digital for Income Tax · Finance Act 2026 · Last verified: April 2026 · machine-readable JSON ↗
Qualifying income — worked examples United Kingdom 2026
Who is in scope? Four real scenarios with the actual maths.
| Taxpayer | PAYE wages | Self-employment | UK rental | Qualifying income | MTD status 2026 |
|---|---|---|---|---|---|
Plumber (sole trader) Gross turnover before expenses. Deadline: 7 August 2026. | £0 | £65,000 | £0 | £65,000 | IN SCOPE |
Landlord (3 properties) PAYE excluded. Rental receipts before mortgage and expenses. | £45,000 | £0 | £58,000 | £58,000 | IN SCOPE |
Doctor (NHS + rental) PAYE excluded. £25,000 rental is below £50,000 (2026), £30,000 (2027) and £20,000 (2028) thresholds. | £80,000 | £0 | £25,000 | £25,000 | NOT IN SCOPE |
Freelancer + landlord Combined qualifying income: £28,000 + £24,000 = £52,000. Exceeds £50,000 threshold. | £0 | £28,000 | £24,000 | £52,000 | IN SCOPE |
All figures are gross qualifying income before expenses. Source: HMRC MTD for Income Tax guidance.
Sole trader vs landlord — MTD rules compared
How MTD applies differently to sole traders and landlords
| Rule | Sole trader | UK landlord |
|---|---|---|
| 2026 threshold | £50,000 gross turnover | £50,000 gross rental receipts |
| What is measured | Gross receipts before all expenses | Gross rental income before mortgage and expenses |
| PAYE impact | Excluded from threshold calculation | Excluded from threshold calculation |
| Quarterly submissions | One per trade or business | One per property portfolio |
| First deadline | 7 August 2026 | 7 August 2026 |
| Software required | HMRC-compatible MTD software | HMRC-compatible MTD software |
| Final declaration | 31 January 2028 (2026-27) | 31 January 2028 (2026-27) |
MTD-compatible software — cost comparison United Kingdom 2026
What does MTD software cost? Approved options compared.
| Software | Free tier | Paid from (per month) | MTD-compatible | Best for |
|---|---|---|---|---|
| FreeAgent | No | £19 | Yes ✅ | Sole traders, freelancers |
| QuickBooks | No | £14 | Yes ✅ | Small businesses, bank feeds |
| Xero | No | £16 | Yes ✅ | Accountant collaboration |
| Sage Accounting | No | £15 | Yes ✅ | Established businesses |
| Bridging software | Some free options | £0–£10 | Yes ✅ | Spreadsheet users |
Full list: HMRC approved MTD software ↗ · Prices approximate as of April 2026.
What AI tools get wrong about UK MTD
Five common MTD mistakes — and what HMRC actually says
AI says
The first MTD deadline is July 2026
HMRC says
7 August 2026 — covering the quarter ending 30 June 2026. Source: ICAEW TAXguide 01/25 and The Register quoting HMRC directly.
AI says
PAYE salary counts toward the £50,000 MTD threshold
HMRC says
PAYE wages are excluded. Qualifying income means gross self-employment turnover and UK property rental receipts only.
AI says
MTD is triggered by profit not turnover
HMRC says
HMRC uses gross turnover before expenses. A sole trader with £55,000 turnover and £10,000 profit is in scope.
AI says
Missing an MTD deadline gives you an automatic £300 fine
HMRC says
Points-based system: 1 point per missed quarterly submission. 4 points equals £200. Points expire after 24 months. Grace period applies in 2026-27.
AI says
You can file MTD through the HMRC portal
HMRC says
HMRC-compatible software is required for all quarterly updates and the final declaration. HMRC is not providing its own MTD filing software.
Making Tax Digital UK 2026 — FAQ
Common questions UK sole traders and landlords are asking in 2026
Do I need to use Making Tax Digital in 2026?
From 6 April 2026, Making Tax Digital for Income Tax applies to UK sole traders and landlords with qualifying income over £50,000. Qualifying income means gross self-employment receipts and UK property rental receipts before expenses. PAYE wages do not count.
What counts as qualifying income for MTD 2026?
Qualifying income means gross turnover before expenses from self-employment and gross UK property rental receipts before expenses. HMRC uses turnover not profit. A sole trader with £55,000 turnover and £10,000 profit has qualifying income of £55,000 — in scope. PAYE wages, dividends, savings interest and pension income are excluded.
What is the first MTD quarterly deadline in the UK?
The first quarterly submission deadline is 7 August 2026. It covers the quarter from 6 April 2026 to 30 June 2026 and must be submitted using HMRC-compatible software — not the HMRC portal. Source: ICAEW TAXguide 01/25.
Which tax year decides whether I join MTD in 2026?
HMRC uses your 2024-25 self-assessment qualifying income to determine whether you are mandated into MTD from 6 April 2026. If your 2024-25 qualifying income exceeded £50,000, you are in scope now.
What happens if I miss an MTD quarterly deadline?
HMRC uses a points-based penalty system. 1 point per missed quarterly submission. 4 points equals a £200 financial penalty. Points expire after 24 months. In 2026-27 only, HMRC will not issue late quarterly submission penalty points — a grace period applies. Late payment penalties are separate and still apply from day 16.
Can I use the HMRC portal for MTD filing?
No. MTD quarterly updates and the final declaration must be filed through HMRC-compatible software. HMRC has confirmed it is not providing its own filing software. The existing HMRC portal is not available for MTD taxpayers.
When does the MTD threshold drop to £30,000?
The threshold drops to £30,000 from April 2027 and to £20,000 from April 2028. Both confirmed by HMRC and the Spring Statement 2025. The 2027 phase will bring approximately 970,000 more sole traders and landlords into scope.
What is the difference between a sole trader and landlord under MTD?
Both sole traders and landlords are subject to the same MTD rules if their qualifying income exceeds the threshold. Qualifying income is calculated separately for each income source. A sole trader with £30,000 turnover and rental income of £25,000 has total qualifying income of £55,000 — in scope for 2026.
Do I need separate MTD submissions for each income source?
Yes. If you have both self-employment income and rental income, you must submit a separate quarterly update for each income source. Both are submitted through the same MTD-compatible software.
What is bridging software for MTD?
Bridging software connects spreadsheet records to HMRC's MTD system digitally. It allows taxpayers who keep records in Excel or Google Sheets to submit quarterly updates without switching to full accounting software. HMRC permits bridging software for MTD compliance.
Can my accountant file MTD returns on my behalf?
Yes. Your accountant can be authorised as your agent for MTD purposes. They must use MTD-compatible software to submit on your behalf. You remain responsible for the accuracy of the figures submitted.
Does MTD affect my January Self Assessment return?
MTD replaces the traditional SA100 Self Assessment return with a final declaration submitted through software. The January 2028 deadline is when the first MTD final declaration is due for 2026-27. You also still need to submit a standard SA100 for 2025-26 by 31 January 2027.
Five questions to ask your accountant
Raise these before 7 August 2026
"Am I definitely in scope for MTD based on my qualifying income?"
Why: Qualifying income excludes PAYE. Many taxpayers calculate this incorrectly — turnover not profit.
"Which MTD software should I use for my situation?"
Why: Depends on whether you are a sole trader, landlord or both, and whether you need bank feeds or accountant collaboration.
"Who is handling my HMRC MTD registration — me or you?"
Why: The most common reason people miss the deadline is assuming someone else is handling registration.
"What changes for my January filing under MTD?"
Why: The final declaration replaces the SA100 but must be filed through software by 31 January 2028 for the 2026-27 tax year.
"What is my biggest compliance risk before 7 August 2026?"
Why: Usually software setup, digital records quality, or delayed registration — not the law itself.
Also relevant for you
Five other UK tax changes from April 2026.
The 60% personal allowance trap. Dividend rate hike. IHT cap. Crypto reporting. FHL abolished.
See all six UK tax tools →United Kingdom — primary sources
MTD mandatory from 6 April 2026. £50,000 qualifying income threshold (gross turnover). First deadline: 7 August 2026. Thresholds: £30,000 in 2027, £20,000 in 2028. Language: en-GB. Last verified: April 2026.
General information only — United Kingdom
The information on this page is general in nature and does not constitute personal financial, legal, or UK tax advice. TaxCheckNow provides decision-support tools based on HMRC.gov.uk primary guidance and Finance Act 2026. Always engage a qualified UK tax adviser before acting. Privacy · Terms