Last reviewed: 29 September 2026 · Reviewed by IFM's qualified accountant
It does not mean paying Income Tax four times a year. Quarterly updates report cumulative income and expense summaries; the ordinary final tax calculation and payment process still follows after the tax year.
What should you know about the rollout thresholds?
The statutory timetable uses gross qualifying income before expenses. People with qualifying income over £50,000 on the 2024/25 return entered MTD from 6 April 2026. Those over £30,000 on the 2025/26 return enter from 6 April 2027, and those over £20,000 on the 2026/27 return enter from 6 April 2028.
These are entry thresholds, not profit allowances. Add gross receipts from all sole trades and relevant property businesses. Do not include employment salary, dividends or pension income in qualifying income, although those amounts still belong in the final tax return where applicable.
HMRC reviews submitted returns and normally writes to people it identifies, but responsibility does not depend on receiving a letter. Check the figures and start date directly.
Who is in scope?
The current regime applies to individuals registered for Self Assessment who receive self-employment or property income and exceed the relevant threshold. It can apply where neither source alone exceeds the threshold but their combined gross income does.
Partnerships have a later timetable that HMRC will set out separately. A partner's separate sole-trade or property income can still need review. Limited-company income is not reported under MTD for Income Tax simply because the same person directs the company.
Trustees, personal representatives and certain other categories have specific exclusions or exemptions. Use HMRC's checker for the individual's legal status rather than treating every tax return alike.
What should you know about exemptions?
Some people are automatically exempt, while others can apply for exemption, including where it is not reasonable or practical to use digital tools because of age, disability, location, religion or another relevant circumstance. An exemption from MTD does not exempt the income from tax or remove the need for a Self Assessment return.
There are also temporary exemptions and special rules for some circumstances. Apply through HMRC and retain the decision. Do not assume discomfort with software is by itself an approved exemption.
What should you know about digital records?
From the MTD start date, the person must create and keep digital records of business and property income and expenses. Record individual transactions close to the transaction date, including the amount, date and category required by the software and rules.
The records can be held in accounting software, an app or a spreadsheet connected by compatible bridging software. Copying totals manually from a spreadsheet into a web form can break the required digital links. Check the product appears on HMRC's compatibility list for the functions needed.
Separate each source correctly. A sole trade and a property business require their own digital records and quarterly updates, even though the final return brings the overall tax position together.
What should you know about quarterly updates for 2026/27?
For standard periods in 2026/27, cumulative updates cover 6 April to 5 July, 5 October, 5 January and 5 April. The deadlines are 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027.
Calendar periods can cover 1 April to 30 June, 30 September, 31 December and 31 March, with the same four deadlines. Select calendar periods in the software before sending the first update for that income source.
Each update is cumulative from the start of the tax year or calendar basis to the period end. It is a summary of digital records, not a set of final accounts. Accounting and tax adjustments can wait for the final return where the rules allow.
For 2026/27 HMRC says it will not apply penalty points for late quarterly updates, but the updates must still be sent before the final tax return can be submitted. Penalty rules can apply to late final returns, and the easement should not be treated as permission to abandon the records.
What should you know about the final tax return?
After the fourth update, review the records, make year-end adjustments, claim reliefs and allowances, add other income and gains, and submit the final tax return through compatible software. For 2026/27, the deadline is 31 January 2028.
The tax calculation may include employment, dividends, savings, gains and other information not contained in quarterly business updates. Quarterly estimates are not the final liability.
Payment dates remain separate. A balancing payment and first payment on account can be due on 31 January, with a second payment on account on 31 July where the rules apply.
What should you know about agents and software responsibilities?
An agent can manage records and submissions, but the taxpayer remains responsible for accurate information and timely returns. Agree who enters transactions, keeps digital evidence, reviews categories and approves updates.
If an agent submits, authorisation must be in place through the appropriate agent services process. The business still needs access to information and a continuity plan if the software or adviser changes.
Do not choose software only because it has the lowest advertised price. Check bank feeds, property and multi-business handling, corrections, exports, accessibility, support, final-return capability and access for the agent.
What should you know about changes during the year?
Tell HMRC through the prescribed route when an income source starts or ceases. A new source may enter the MTD cycle after it first appears on a tax return, unless the person chooses earlier reporting. A source that stops generally needs a final quarterly update covering the cessation.
If income later falls below the threshold, the person does not necessarily leave immediately. HMRC's current rules use a multi-year test before someone can opt out. Check the live guidance before changing the process.
What should you know about prepare a workable routine?
Open a separate bank account for business activity where practical, issue invoices consistently and capture receipts as they arise. Reconcile monthly, review unpaid invoices and maintain a tax reserve. Set internal quarterly cut-offs before the statutory dates.
Run a complete test submission before the first deadline. Check that prior-year comparative records, opening balances and property ownership are correct. Keep exports so records remain accessible if the software contract ends.
See sole trader and landlord support for the relevant service page. Use the Deadline Finder for standard first accounts, first confirmation statement and Corporation Tax dates. For VAT, payroll, personal tax and other obligations, check the tax deadlines calendar and your official records.
What should you know about evidence to retain?
Keep the threshold calculation, HMRC sign-up confirmation, software authorisation and submission acknowledgements. Preserve exports of ledgers, category totals and corrections for each source.
Record decisions about standard or calendar periods, joint-property expenses and any exemption. If an agent handles submissions, retain approval of the figures and a responsibility schedule.
Review access and data exports annually. Changing software or adviser must not break the digital audit trail or leave the taxpayer unable to produce records during an HMRC check.
What should you know about annual review?
After the final return, compare quarterly totals with the completed accounts and explain adjustments. Review software, responsibilities and the next threshold position.
Carry lessons into the new year's procedure before the first update period ends. MTD is a continuing record system, not four isolated filing events.
What should you read next?
Use the Deadline Finder for standard first accounts, first confirmation statement and Corporation Tax dates. For VAT, payroll, personal tax and other obligations, check the tax deadlines calendar and your official records.
What do people also ask about this topic?
What should you know about the rollout thresholds?
The statutory timetable uses gross qualifying income before expenses. People with qualifying income over £50,000 on the 2024/25 return entered MTD from 6 April 2026. Those over £30,000 on the 2025/26 return enter from 6 April 2027, and those over £20,000 on the 2026/27 return enter from 6 April 2028.
Who is in scope?
The current regime applies to individuals registered for Self Assessment who receive self-employment or property income and exceed the relevant threshold. It can apply where neither source alone exceeds the threshold but their combined gross income does.
What should you know about exemptions?
Some people are automatically exempt, while others can apply for exemption, including where it is not reasonable or practical to use digital tools because of age, disability, location, religion or another relevant circumstance. An exemption from MTD does not exempt the income from tax or remove the need for a Self Assessment return.
What should you know about digital records?
From the MTD start date, the person must create and keep digital records of business and property income and expenses. Record individual transactions close to the transaction date, including the amount, date and category required by the software and rules.
Which official sources support this guide?
- https://www.gov.uk/guidance/find-out-if-and-when-you-need-to-use-making-tax-digital-for-income-tax
- https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/before-you-use-this-guide
- https://www.gov.uk/guidance/use-making-tax-digital-for-income-tax/create-digital-records
General guidance, not advice for your situation.
