Making Tax Digital for Income Tax: A Complete 2026 Guide for the UK's Self-Employed and Landlords
The traditional Self Assessment tax return is being phased out, and for many sole traders and landlords across the UK, that change has already begun. Making Tax Digital for Income Tax (MTD for IT, sometimes called MTD ITSA) became mandatory for the first wave of taxpayers from 6 April 2026, and HMRC is continuing to write to affected individuals confirming when they must join.
If you're self-employed, a landlord, or both, here's what's actually changing, who it affects right now, and how to get ahead of it before the next threshold drop arrives.
What Is Making Tax Digital for Income Tax?
MTD for Income Tax replaces the old system of filing one Self Assessment return a year with three things: ongoing digital record-keeping, quarterly updates sent to HMRC, and a final declaration at year-end instead of a single tax return. The aim is to give HMRC more frequent visibility of income and expenses and to push everyone toward keeping records in HMRC-recognised software rather than spreadsheets, paper, or a shoebox of receipts.
It's worth being clear about what it does not replace: this is about Income Tax for individuals, not VAT or Corporation Tax. If you trade through a limited company, MTD for IT doesn't currently apply to you at all.
The Threshold Timeline
MTD for IT is being rolled out gradually, based on your gross income from self-employment and/or property in a given tax year:
From 6 April 2026 – mandatory if your gross income from self-employment and/or property was more than £50,000 in the 2024/25 tax year
From 6 April 2027 – the threshold drops to £30,000, based on 2025/26 income
From 6 April 2028 – the threshold drops again to £20,000, based on 2026/27 income
The figure that matters is your qualifying income — the combined gross income (before expenses) from self-employment and property, including overseas property. So if you earn £30,000 from a trade and £21,000 from rental income, your qualifying income is £51,000, and you're in scope from April 2026 even though neither source alone crosses £50,000 on its own.
Partnerships, including LLPs, are not yet brought into MTD for IT in respect of their partnership income, although individual partners can still be caught if they have other qualifying income of their own.
Who's Affected — and Who Isn't
In scope now or soon:
Sole traders with qualifying income above the relevant threshold
Landlords, including those with multiple properties or furnished holiday lets
Anyone combining self-employment and rental income that together exceeds the threshold
Currently exempt or deferred:
Limited companies (no MTD mandate yet for Corporation Tax)
General partnerships and LLPs, in respect of partnership income
Trusts and estates
Anyone below the relevant income threshold, who continues filing under the existing Self Assessment system
If HMRC believes you meet the criteria, they'll write to confirm you must start using MTD for IT from the relevant date — but the legal responsibility to check your own qualifying income sits with you, not with waiting for a letter.
What Changes Day to Day
For anyone brought into MTD, the practical shift looks like this:
Digital records throughout the year rather than compiling everything at year-end. Income and expenses need to be logged in MTD-compatible software as you go.
Quarterly updates to HMRC — four submissions a year summarising income and expenses, rather than one annual return.
A Final Declaration at the end of the tax year, which replaces the old Self Assessment return and confirms your total tax position after any adjustments or allowances.
MTD-recognised software is mandatory. Spreadsheets can sometimes work if bridged through compatible software, but the direction of travel is firmly toward cloud platforms like Xero or QuickBooks.
If your qualifying income stays under the threshold for your year, none of this applies yet — you carry on filing your Self Assessment return as normal, on the usual 31 January deadline.
Why It's Worth Acting Before You're Forced To
Even if you're a year or two away from being caught by the lower thresholds, there are good reasons not to wait for the letter from HMRC. Software needs to be set up and connected correctly, historic records often need tidying before they can be migrated digitally, and the first few quarterly submissions are where most errors happen — usually because someone is filing for the first time under pressure rather than with a system that's already bedded in.
There's also a quieter trap in the qualifying income rules: because property and self-employment income are combined, people who never thought of themselves as "in scope" — a landlord with a small consultancy on the side, for example — can find they've crossed the threshold without realising it.
How Hayes Chartered Certified Accountants Can Help
This is exactly the kind of transition where having an ACCA-certified accountant in your corner makes the difference between a stressful scramble and a smooth handover. Hayes Chartered Certified Accountants and Tax Consultants provides a full, end-to-end Making Tax Digital service for sole traders, landlords, and partnerships across London and the UK, including:
Checking your qualifying income against the current thresholds and confirming whether and when MTD applies to you
Full HMRC registration and sign-up for MTD for Income Tax
Setup and training on MTD-compatible software such as Xero and QuickBooks
Ongoing quarterly update preparation and submission
Support with the Final Declaration at year-end
Guidance on exemptions, where they apply
If you're still filing under the current system, our Self-Assessment tax return service continues to handle that for you, while we help you plan ahead for whichever threshold year will eventually bring you into MTD. We work closely with self-employed individuals and landlords specifically, so the advice you get reflects how MTD applies to your actual income mix, not a generic checklist.
Get Ahead of the Next Threshold
Whether you're already required to comply from April 2026, or you're watching the £30,000 and £20,000 thresholds approach in the next couple of years, the earlier you set up properly, the less disruptive the switch will be.
Book a free consultation with Hayes Chartered Certified Accountants and we'll confirm exactly where you stand and what, if anything, you need to do next.