Making Tax Digital for Income Tax
MTD is already here. Find out when it applies to you.
SV&Co helps sole traders and landlords across Southall, Ealing, Hayes, Wembley and wider West London check their MTD position, choose suitable software, keep digital records and manage quarterly updates and the annual tax return.
The first MTD quarterly deadline has already passed.
For the first cohort, the first update was due on 7 August 2026. HMRC says there are no penalty points for late quarterly updates for 2026/27, but the updates still need to be sent before the MTD tax return can be submitted.
Free MTD Checker
When are you likely to enter Making Tax Digital?
Use gross self-employment and property income before expenses. The checker deliberately asks about the tax year because HMRC uses an earlier tax return to determine the MTD start date.
Official basis: GOV.UK / HMRC
Last checked: 16 August 2026
Live site uses SV&Co Official Data Hub
How MTD works
Four quarterly updates do not replace the annual tax return.
The system spreads record keeping through the year, but there is still an annual tax-return stage.
Keep digital records
Record the relevant self-employment and property income and expenses in compatible software.
Send quarterly updates
The software totals the digital records and sends income and expense information to HMRC.
Review the year
After year end, make the necessary accounting and tax adjustments and add other reportable income.
Submit the tax return
Complete and submit the annual tax return from MTD-compatible software by 31 January.
A quarterly update is not a quarterly tax return.
HMRC says accounting and tax adjustments do not need to be made before a quarterly update is sent. The figures build an estimated tax position during the year.
Quarterly deadlines
The four deadlines stay the same each year.
Most customers can use standard tax-year update periods, or choose calendar update periods. The submission deadlines are the same.
7 August
First quarterly update deadline.
7 November
Second quarterly update deadline.
7 February
Third quarterly update deadline.
7 May
Fourth quarterly update deadline, after the tax year ends.
Standard update periods
- 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.
Calendar update periods
- 1 April to 30 June → 7 August.
- 1 April to 30 September → 7 November.
- 1 April to 31 December → 7 February.
- 1 April to 31 March → 7 May.
HMRC says you cannot change the update-period method for a tax year after you have sent a quarterly update.
Software and bookkeeping
The right MTD software should reduce admin rather than simply create another subscription.
HMRC does not provide its own MTD bookkeeping software. You need compatible commercial software or a compatible bridging solution.
Choose around the way you work
- Bank feeds and transaction volume.
- Invoice and receipt capture.
- Rental property versus trading business.
- More than one income source.
- VAT or payroll alongside MTD.
- Whether you want your accountant to manage most of the process.
The best system is not automatically the most expensive package. It is the one that fits the records and is actually used properly.
What MTD software needs to support
- Create and maintain digital self-employment and property records.
- Send quarterly updates.
- Complete and submit the annual tax return.
- Link or bridge appropriately where spreadsheets or other software are retained.
Exemptions
Some people are automatically exempt. Others need to apply.
Exemptions have detailed rules, so the checker deliberately sends unusual cases for review rather than pretending every case is simple.
Digital exclusion
You may be able to apply where it is not reasonable for you to use compatible software because of circumstances such as age, disability, religious beliefs or inability to obtain suitable internet access.
Automatic exemptions
HMRC lists certain automatic exemptions, including some cases involving no National Insurance number, personal representatives, specific return pages or claims and other defined circumstances.
Not enough on its own
HMRC says simply being unfamiliar with accounting software, having few records, previously filing on paper, or facing extra time or cost is not by itself enough for a digital-exclusion exemption.
MTD FAQs
Questions clients are asking now.
I did not receive an HMRC letter. Does that mean MTD does not apply?
No. HMRC says you should still check your qualifying income yourself. If it is above the relevant threshold, not receiving a letter does not remove the requirement.
Is the £50,000 threshold based on profit?
No. Qualifying income is broadly gross income before expenses from self-employment and property, based on the relevant earlier tax return.
If I have £35,000 self-employment income and £20,000 rent, do they combine?
Normally yes. Personal self-employment and property income can be combined for the qualifying-income test, so those figures would total £55,000 before expenses.
Does my PAYE salary count towards the MTD threshold?
No. Employment income does not count towards qualifying income for the MTD threshold.
Does my partnership share count?
HMRC says a share of partnership profit as an individual partner does not count towards qualifying income. Partnerships themselves are expected to enter MTD later, but the timetable has not yet been set.
I missed 7 August 2026. Will I get a quarterly penalty?
HMRC currently says there are no penalty points for late quarterly updates in 2026/27. You still need to keep digital records and send the required updates before submitting the annual MTD tax return.
Do quarterly updates replace Self Assessment?
No. You still have an annual tax-return stage. For tax years after you start MTD, the tax return is completed and submitted through MTD-compatible software.
Reviewed by
Sandip Vadher, PhD FCCA
Founder of SV&Co Accountancy. Fellow Chartered Certified Accountant with more than 20 years of finance and accountancy experience.
MTD setup and quarterly support
If MTD applies, make the bookkeeping system do most of the work.
SV&Co can review your qualifying income, help with sign-up, recommend appropriate software, organise digital records and manage the quarterly and annual reporting process.
Useful information to send us
Your 2024/25 and 2025/26 self-employment/property gross income, whether you received an HMRC MTD letter, current bookkeeping software and whether the 2026/27 digital records are up to date.
Making Tax Digital for Income Tax requires eligible sole traders and landlords to keep digital records and submit quarterly updates. SV&Co helps clients prepare records, software and processes.