If you are a self-employed business owner or a landlord in the UK, a massive shift in how you report your income is right around the corner. HM Revenue & Customs (HMRC) has issued an urgent warning to more than 860,000 individuals: Making Tax Digital (MTD) for Income Tax formally launches on 6 April 2026.
With only two months left to prepare, anyone who meets the criteria must transition away from traditional annual filings and move to digital reporting.
Here is exactly what you need to know, who is affected, and how to get ready.
What is Changing?
Starting this April, eligible sole traders and landlords will no longer just file one major Self Assessment return at the end of January. Instead, you will be required to:
- Keep digital records of all business income and expenses.
- Use HMRC-approved software to manage your accounts.
- Send “light-touch” quarterly updates to HMRC directly through your software.
Important Note: These quarterly updates are not four extra tax returns. They are simply quick summaries generated by your software to help spread the tax administration load throughout the year and reduce manual errors.
Do These Rules Apply to You?
The rollout is happening in phases based on how much you earn. The first wave hits this April, targeting high earners, but lower thresholds will roll out sequentially over the next two years.
| Date You Must Join | Qualifying Income Threshold | Based on Tax Year |
| 6 April 2026 | £50,000+ | 2024–25 tax year |
| 6 April 2027 | £30,000+ | 2025–26 tax year |
| 6 April 2028 | £20,000+ | 2026–27 tax year |
If your gross self-employment or property income (before expenses) was over £50,000 in the 2024-25 tax year, you are in the first wave and must act now.
Key Deadlines for the First Wave (April 2026)
If you fall into the £50,000+ bracket, your traditional Self Assessment timeline is changing. While you will still file your older 2025-26 tax return normally by January 2027, your new digital deadlines will look like this:
- 7 August 2026: Quarter 1 Digital Update Due
- 7 November 2026: Quarter 2 Digital Update Due
- 7 February 2027: Quarter 3 Digital Update Due
- 7 May 2027: Quarter 4 Digital Update Due
- 31 January 2028: Finalized MTD Self Assessment Return Due
What About Penalties?
To prevent panic, the government has announced a 12-month grace period. For the first year (starting April 2026), you will not receive penalty points for late quarterly updates.
Once the grace period ends, HMRC will operate a points-based system. Each late submission gives you one point, and a physical £200 fine will only kick in once you hit four points. This ensures that minor, accidental slip-ups won’t result in immediate penalties.
How to Get Ready
HMRC’s Director of Making Tax Digital, Craig Ogilvie, has urged everyone in scope to stop waiting: “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.”
If you are affected, take these steps immediately:
- Check your income levels from past tax years to see which phase you belong to.
- Choose compatible software. HMRC has list of approved options on their website, including several free versions.
- Talk to your accountant. If you use a tax agent, contact them immediately to make sure they are migrating your accounts over to an MTD-compliant system.
If you are genuinely unable to use digital tools due to age, disability, or remote location, you can apply to HMRC for an official exemption.
If you are interested to learn more
Feel free to contact us on the below to ensure you are complying today.
0203 4688 788
info@npus.co.uk
