If you are a sole trader or landlord, the way you report income to HMRC is changing. This is the plain-English guide to what MTD for Income Tax is, who it affects, when it starts for you, and exactly what to do to get ready.
Making Tax Digital for Income Tax is the biggest change to Self Assessment in a generation. It moves the self-employed and landlords from a single annual return to keeping digital records and reporting to HMRC through the year.
MTD for Income Tax is being introduced in stages, based on your qualifying income. Find your income band to see when the rules apply to you.
| From | Who comes into scope | Qualifying income | First quarterly update |
|---|---|---|---|
| 6 April 2026 | Sole traders & landlords Live now for the highest earners | Over £50,000 | Due before 7 August 2026 |
| 6 April 2027 | Sole traders & landlords Threshold steps down | Over £30,000 | Due before 7 August 2027 |
| 6 April 2028 | Sole traders & landlords Threshold steps down again | Over £20,000 | Due before 7 August 2028 |
Qualifying income is your gross self-employment and property income added together, before expenses, not your profit. Corporation Tax and partnerships are not in scope yet. Always check your own position with HMRC's official tool at gov.uk.
Under MTD for Income Tax, the once-a-year scramble becomes a light, steady rhythm. There are three parts to it.
Keep a digital record of your business income and expenses as you go, in HMRC-recognised software rather than on paper.
Send HMRC a short summary of your income and expenses four times a year. With Clear Books the figures are already there to review and submit.
After the tax year ends, confirm your figures and any other income in a final declaration. This replaces your old Self Assessment return.
Keep digital records, file quarterly updates and submit your final declaration, all in one place. Free for sole traders, with no filing paywall.
Grab the free plan, add your income and expenses, and file your first quarterly update in minutes. HMRC-recognised, with no filing paywall.
