Making Tax Digital for Income Tax started in April 2026, and from September 2026 HMRC has been signing people up to it whether or not they got round to it themselves. If a letter has landed, or appeared in your HMRC online account, it isn't a scam and it isn't optional. Here's what it means, and the three or four things worth sorting before your first deadline.
Who has to use Making Tax Digital, and from when?
It depends on your income from self-employment and property, and it's being phased in over three years.
- Over £50,000 in the 2024 to 2025 tax year: you needed to start from 6 April 2026.
- Over £30,000 in the 2025 to 2026 tax year: you start from 6 April 2027.
- Over £20,000 in the 2026 to 2027 tax year: you start from 6 April 2028.
It applies to sole traders and landlords who file a Self Assessment return. If you're only employed, or you run a limited company, this particular change isn't yours to worry about. Company directors who also have rental income are the ones who get caught out, because the rent counts even when the salary doesn't.
What is qualifying income, exactly?
It's your total income from self-employment and property before you take any expenses off, taken from the tax return you filed for the year before. HMRC call it qualifying income, most people would call it turnover plus rent.
That "before expenses" bit is the part that catches people. A landlord with £55,000 of rent and a mortgage that swallows most of it is over the line, even though the profit is nowhere near £50,000. Two properties and a bit of freelance work get added together, because it's the total that counts, not each source on its own.
Why has HMRC signed me up without asking?
Because from September 2026 HMRC started signing up people it can see are over the threshold and haven't registered themselves. You'll get a confirmation letter, either by post or in your HMRC online services account, depending on how you usually hear from them.
It doesn't change what you owe. It changes how and when you report it, and it means the clock is already running on your first quarterly update. If you think HMRC have got it wrong, that's worth a conversation quickly rather than in January.
What actually changes day to day?
Three things, and the first one is the one that takes the adjusting.
Your records have to be digital. Not a shoebox, not a spiral notebook, and not a spreadsheet on its own unless it's bridged into approved software. Income and expenses get recorded as you go, in software that talks to HMRC.
You need compatible software. HMRC don't provide it. There's a list of products that work with the system on GOV.UK, and they range from free tools for very simple affairs to the full bookkeeping packages. If you already use QuickBooks or Xero, you're most of the way there.
You report four times a year instead of once. Each update is a running total of your income and expenses for the year so far, not a finished set of accounts. Nobody expects it to be perfect, and you can correct figures later.
When are the quarterly deadlines?
If you use the standard periods, they're the same every year:
| Period covered | Deadline |
|---|---|
| 6 April to 5 July | 7 August |
| 6 April to 5 October | 7 November |
| 6 April to 5 January | 7 February |
| 6 April to 5 April | 7 May |
If your books run to month ends, you can choose calendar quarters instead (1 April to 30 June, and so on) and keep the same four deadlines. Pick one or the other before you send your first update of the year, because you can't switch part way through.
Do I still file a tax return?
Yes. The quarterly updates don't replace it. At the end of the year you still finalise everything and submit your return, and your tax is still due by 31 January after the end of the tax year. The updates are a running commentary; the return is still the thing that settles the bill.
One knock-on that surprises people: you can't sign up if last year's return is still outstanding. If you're behind, that's the first job.
Can I be let off?
Sometimes. There's an exemption for digital exclusion, where age, disability, location or religious belief make it unreasonable for you to use the software, and a few other narrow cases. It isn't a matter of preferring paper, and it has to be applied for rather than assumed.
If you think you qualify, apply rather than ignore the letter. The obligation stands until HMRC agree it doesn't.