Navigating the first year of Making Tax Digital for Income Tax
Discover what Making Tax Digital (MTD) for Income Tax means for you. Understand what’s changing, who needs to join and when - plus how we can help you prepare and stay compliant.
Read time: 7 mins Added: 28/07/26
What you'll need to do
Explaining MTD qualifying income and key dates
HMRC is introducing Making Tax Digital for Income Tax in phases, based on your qualifying income – that’s your total gross income (before deducting expenses or taxes) from self‑employment and/or property added together. Other income types, for example PAYE employment, dividends, and pensions do not count towards the thresholds.
Tip:
To see if you need to start using Making Tax Digital for Income Tax from 6 April 2026, check your 2024/25 Self Assessment figures for qualifying income. Some sole traders and landlords can claim an exemption (for example, if it isn’t reasonably possible for you to use digital tools).
What counts as qualifying income?
Not sure you’re in scope? We’ve put together some examples of how Making Tax Digital applies to the self-employed and landlords.
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Liam
- Employment: self-employed.
- Combined 2024/25 gross income: £55,500, broken down as £28,000 from photography, and £27,500 from part-time videography.
In scope? Yes.
As Liam’s gross self‑employment income is over £50,000, he’ll need to start using Making Tax Digital for Income Tax from 6 April 2026 - unless he’s exempt.
His first quarterly update deadline is 7 August 2026.
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Hannah
- Employment: individual short-term landlord - she lets out a UK flat for short-term stays.
- 2024/25 gross property income: £34,000.
In scope? Not yet.
Hannah’s 2024/25 qualifying income is below £50,000, so she will not need to start using Making Tax Digital for Income Tax in April 2026.
If her 2025/26 qualifying income is over £30,000, she’ll need to start using Making Tax Digital for Income Tax from 6 April 2027.
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Omar
- Employment: works for an employer (£45,000) and runs a mobile coffee cart (£18,500).
- 2024/25 gross income from coffee cart: £18,500.
In scope? Not yet.
Income Tax is automatically taken out of your pay from an employer - so this doesn’t count towards the threshold.
Omar’s qualifying income for 2024/25 is £18,500, so he won’t need to use Making Tax Digital for Income Tax from April 2026.
If his cart income is over £30,000 in 2025/26, he’ll need to start using Making Tax Digital for Income Tax from 6 April 2027.
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Sophie
- Employment: individual landlord with 2 UK rental properties.
- 2024/25 gross rental income: £78,000.
In scope? Yes.
Sophie’s 2024/25 qualifying income is over £50,000, so she’ll need to start using Making Tax Digital for Income Tax from 6 April 2026.
She’ll need to send quarterly updates - her first deadline is 7 August 2026. She’ll need to report her UK property income as a single property income source.
If she owns a foreign property or is self-employed, these would need to be sent as separate updates.
MTD quarterly reporting dates for Income Tax
View the key date timelines to find out when you need to start reporting your quarterly income to HMRC.
If your qualifying income for the 2024/25 tax year was over £50,000, the rules would apply to you from 6 April 2026. From then, you’ll need to keep your digital records in compatible software and send quarterly updates to HMRC. The standard deadlines for quarterly updates are 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027.
Note: your 2025/26 Self Assessment tax return is due on 31 January 2027, and it should be completed under the existing Self Assessment process through HMRC online services. Making Tax Digital for Income Tax doesn’t apply to earlier tax years, which means the 2025/26 tax return (the tax year that ended on 5 April 2026) sits outside the new rules.
Check the timeline for what the key dates will look like if you start using Making Tax Digital for Income Tax from 6 April 2026.
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MTD for Income Tax timeline Date
Event
Date
6 April 2026
Event
When you must start keeping records using MTD for Income Tax software
Date
7 August 2026
Event
Deadline to send your first quarterly update
Date
7 November 2026
Event
Deadline to send your second quarterly update
Date
31 January 2027
Event
Deadline to submit a Self Assessment tax return the usual way for 2025 to 2026
Date
7 February 2027
Event
Deadline to send your third quarterly update
Date
7 May 2027
Event
Deadline to send your fourth quarterly update
Date
7 August 2027
Event
Deadline to send your first quarterly update for 2027 to 2028
Date
7 November 2027
Event
Deadline to send your second quarterly update
Date
31 January 2028
Event
Deadline to submit your tax return straight from MTD for Income Tax software for 2026 to 2027
Date
7 February 2028
Event
Deadline to send your third quarterly update
Date
7 May 2028
Event
Deadline to send your fourth quarterly update
How to prepare for Making Tax Digital for Income Tax
- Understand the rules and timing. Confirm if and when you’ll need to start using Making Tax Digital for Income Tax based on your qualifying income and what you’ll do differently.
- Pick compatible software. Find software that works with HMRC’s Making Tax Digital for Income Tax service. You must be able to keep digital records of your income and expenses, send quarterly updates and submit your tax return by 31 January the following year.
- Separate business and personal transactions. If you currently run your business through a personal bank account, consider opening a separate business account before your Making Tax Digital for Income Tax start date. That way, all your business transactions will be in one place, making your records tidy for quarterly updates and tax return.
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This guide shares general information only and doesn’t provide professional tax or legal advice. If you need help with something specific to you or your business, speak to a qualified specialist. Bank of Scotland accepts no liability for any loss or damage that may result from relying on the information in this guide.