First MTD quarterly deadline: 7 August 2026 — Contact Gowin Accountants today.
Making Tax Digital for Income Tax is now compulsory for many UK sole traders and landlords. From 6 April 2026, individuals with qualifying self-employment and property income above £50,000 must maintain digital records and send quarterly updates to HMRC using compatible software. This guide explains who is affected, what must be submitted and how to avoid missing important deadlines.
What Is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax, often shortened to MTD for ITSA, is HMRC’s system for modernising how sole traders and landlords report their income and expenses. Instead of submitting one Self Assessment return each year, affected taxpayers must keep digital business records throughout the year and send regular updates to HMRC through software that connects directly to its systems. This shift is part of a broader move toward HMRC quarterly reporting for individuals with trading and property income, replacing a single annual snapshot with more frequent visibility of your figures.
Who Must Follow MTD for Sole Traders and Landlords from April 2026?
From 6 April 2026, MTD for Income Tax became mandatory for sole traders and landlords whose combined gross income from self-employment and property exceeds £50,000 a year. In practice, this means MTD for sole traders and MTD for landlords now applies to anyone whose combined turnover and rental income crosses the £50,000 mark, regardless of business structure. This figure is based on income reported in a previous tax year, so HMRC has been able to identify and notify most affected taxpayers in advance. If your income sits below this threshold, you are not required to join yet, though the rules are due to widen significantly over the next two years.
How HMRC Calculates Qualifying Income
Qualifying income is the total gross income from self-employment and UK property that HMRC uses to decide whether the MTD rules apply to you. Where someone has more than one business or several rental properties, the income from each source is added together rather than assessed separately. HMRC generally looks at the tax return for the relevant earlier tax year to determine whether the threshold has been crossed, which is why some taxpayers are notified well ahead of their actual start date.
Does the £50,000 Threshold Mean Profit or Turnover?
This is one of the most common points of confusion. The £50,000 threshold is based on gross income, not profit. In practice, this means turnover from a sole trader business and gross rental income from property are added together before any expenses, allowances or deductions are taken off. A landlord or sole trader with modest profit margins can still be well above the threshold once turnover is considered, so it is worth checking your gross figures carefully rather than assuming the rules do not apply because your taxable profit is lower.
What Records Must Be Kept Digitally?
Under MTD, business income and expenses must be recorded digitally using MTD-compatible accounting software, rather than on paper or in a standalone spreadsheet that is not linked to approved software through bridging tools. Records should be kept up to date throughout each quarter and should capture individual transactions rather than periodic summaries. Landlords need to keep digital records for each rental property, while sole traders must record business income and costs by category, ready to be summarised into the quarterly update.
What Must Be Submitted in Your MTD Quarterly Updates?
Each quarter, affected taxpayers must send HMRC a summary of income and expenses for that period as part of their MTD quarterly updates, using MTD-compatible accounting software. This quarterly update is not a full tax calculation, but it does give HMRC a running picture of your income during the year. At the end of the tax year, a final declaration is required, pulling together all four quarterly updates alongside any other income, reliefs and allowances, to confirm the total tax due, in a similar way to the current Self Assessment return.
Important MTD Deadlines for 2026/27
For most sole traders and landlords, the 2026/27 tax year is split into four standard quarters, each with an update deadline falling roughly a month after the quarter ends as part of the new HMRC quarterly reporting cycle. The first deadline is 7 August 2026, covering income and expenses from 6 April to 5 July 2026. The following deadlines are 7 November 2026, 7 February 2027 and 7 May 2027, with the final declaration for the full tax year due by 31 January 2028. Missing the first deadline is a real risk for anyone who has not yet set up compatible software or digital records.
What Happens If You Miss a Quarterly Update?
HMRC has introduced a points-based penalty system for late submissions under MTD. Each missed MTD quarterly update adds a point to your record, and once you reach a set threshold, a fixed penalty is charged. Persistently missing updates, or submitting the final declaration and paying tax late, can lead to further penalties and interest on top. Because the quarterly updates are cumulative through the year, falling behind early can make it harder to catch up before the final declaration deadline.
What Changes from April 2027 and April 2028?
The £50,000 threshold is only the first stage of a wider rollout. From April 2027, the qualifying income threshold drops to £30,000, bringing many more sole traders and landlords into MTD. From April 2028, it falls again to £20,000, extending the rules to a large proportion of smaller businesses and landlords who may currently rely on simple paper or spreadsheet records. Anyone close to these thresholds now should start planning ahead, since digital record keeping and software setup take time to embed properly.
How Our MTD Accountant in Basingstoke Can Help
Moving to Making Tax Digital for Income Tax is as much a change in habits as it is a change in software. As a dedicated MTD accountant in Basingstoke, Gowin Accountants can review your gross self-employment and property income to confirm whether and when MTD applies to you, recommend and set up MTD-compatible accounting software, and take care of your digital record keeping and quarterly submissions to HMRC. We support sole traders and landlords across Basingstoke and the wider UK, helping clients stay ahead of each deadline rather than scrambling to catch up.
Unsure whether MTD applies to you? Gowin Accountants can check your qualifying income, set up compatible accounting software, maintain your digital records and submit your quarterly updates to HMRC. Contact our Basingstoke team for a free initial consultation.