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HM Revenue & Customs has urged sole traders and landlords earning more than £50,000 from self-employment and property to act now with two months left to prepare for Making Tax Digital (MTD) for Income Tax.
From 6 April 2026, those eligible need to use software to keep digital records and send HMRC quarterly updates of income and expenses. HMRC described the updates as “light-touch” and “not extra tax returns”.
Around 840,000 people need to do it.
Free and paid for software options are available. Once income and expenses are recorded, the software generates a summary to send to HMRC.
At the end of a tax year, those within MTD for Income Tax will still need to file a tax return by the following 31 January.
Craig Ogilvie, HMRC’s director of Making Tax Digital, said:
“With two months to go until MTD for Income Tax launches, now is the time to act. A range of software is available and the system is straightforward and helps reduce errors.
“This will make it easier for sole traders and landlords to stay on top of their tax affairs and help ensure everyone pays the right amount of tax.
“Spreading your tax admin throughout the year means avoiding that last minute scramble to complete a tax return every January. Go to GOV.UK and start preparing today.”
HMRC said around 20,000 quarterly updates have been submitted through a voluntary testing programme.
Those joining MTD this April still file their tax return for the 2025 to 2026 tax year in the usual way by 31 January 2027, as it covers the period before MTD begins. The first MTD tax return, covering the 2026 to 2027 tax year, is due by 31 January 2028.
Penalty points for late quarterly updates will not be imposed for the first 12 months.
After that, penalty points will be given for each late submission, with a £200 fine applied once four points are reached.
MTD for Income Tax will apply to those earning over £30,000 from self-employment from 6 April 2027 and to those earning over £20,000 from 6 April 2028.