The new rules come in on April 6
Sole traders and landlords earning more than £50,000 from self-employment and property are being urged to act now with just six weeks remaining to prepare for Making Tax Digital (MTD) for Income Tax.
From April 6 2026, those eligible will need to use recognised software to keep digital records and send HM Revenue and Customs (HMRC) light-touch quarterly updates of their income and expenses. It’s important to be aware these are not additional tax returns. HMRC is providing a variety of free support to help people prepare, including online guidance, webinars and videos.
Those who genuinely cannot use digital tools can apply for an exemption; more details and guidance are available on GOV.UK.
Free software options are available and once income and expenses are recorded, the software generates a straightforward 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 January 31 – but the software will already hold the information from the quarterly updates, meaning no last-minute search for records or receipts, reports the Daily Record.
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. Thousands of volunteers have already used it successfully.
“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.”
Thousands of sole traders and landlords have already registered for MTD for Income Tax, with more than 12,000 quarterly updates successfully filed through a voluntary testing programme.
Those joining MTD in April 2026 will still submit their tax return for the 2025 to 2026 tax year in the usual manner by January 31 2027, as this covers the period before MTD commences. The first MTD tax return, covering the 2026 to 2027 tax year, will be due by January 31 2028.
To facilitate the transition, the government has announced that customers joining MTD for Income Tax in April 2026 will not receive penalty points for late quarterly updates for the first 12 months.
Under the new system, penalty points will be issued for each late submission, with a £200 penalty only applied once four points are accumulated. This means occasional mistakes won’t result in immediate fines.
HMRC is encouraging those within scope of MTD for Income Tax to act now: read the guidance, choose software and sign up on GOV.UK. Those who use a tax agent should speak to them about preparing.
