Making Tax Digital for Income Tax changes how many sole traders and landlords report their income. Instead of one return a year, it asks for digital records and a short update each quarter. The change begins on 6 April 2026, and it is worth understanding well before then.
Who it applies to
The rules start with sole traders and landlords whose qualifying income is over £50,000. From April 2027 the level drops to over £30,000. Qualifying income is the total from self-employment and property, and it is worth checking your own figures against it rather than assuming either way.
If you are below those levels for now, you can still choose to keep digital records in the same style, which makes the move easier if your income grows.
What changes in practice
The headline change is the rhythm. Rather than gathering a year of figures in January, you send four quarterly updates during the year and a final declaration after it ends. Each update covers a quarter of your income and expenses, taken from digital records.
The quarterly updates are due on 7 August, 7 November, 7 February and 7 May. The final declaration then follows by 31 January, the same date that stands today. The quarterly updates are not full returns on their own, but they do need accurate figures from your records. If a quarter is quiet, you still send an update, even when the figures are small or zero. The rhythm matters more than the size of any single quarter.
What you need to do
Most of the work is in the setup, and it is easier done in the quiet months than in a busy one.
- Keep your records digitally, using software rather than paper or spreadsheets you retype later.
- Record income and expenses as they happen, not in a rush at the quarter end.
- Check that your software can send updates to HMRC, since not every tool can.
- Agree with your accountant who sends each update and who checks it first.
- Review your figures each quarter, so surprises arrive early rather than in January.
If you already use an accountant, ask how they plan to handle the quarterly cycle. If you keep your own records, choose software with time to spare and get used to it for a full quarter before the first deadline.
The upside
Quarterly reporting sounds like more work, and at the start it can be. In practice it spreads the effort across the year, keeps your figures current and makes the January rush much smaller. It also tends to surface problems, such as a missed invoice or a cost you forgot to record, while there is still time to fix them. It also builds a clearer picture of the business through the year, which helps with pricing, cash flow and planning, not just tax.
If you would like help getting ready, a short call is a good place to start. We can look at your income, your software and the dates that apply to you, and set a routine that fits how you work.
