Will Making Tax Digital really start in 2026?

Yes – the new rules begin from 6 April 2026 if your total gross income from self-employment and/or property exceeded £50,000 in the 2024/25 tax year. After that, the rules extend to gross incomes over £30,000 from 6 April 2027, with planned legislation to widen the scope to incomes over £20,000 from 6 April 2028.

What if I earn money from self-employment and property?

You must comply with MTD if your combined gross income from self-employment and property goes over the qualifying threshold. You should keep separate digital records for each income source, but you can manage everything through the same MTD-compatible software. HMRC expects you to send separate quarterly updates for each income source and bring them together in one final declaration at the end of the tax year.

What counts as digital records for MTD?

Digital records include the date, amount and category of each business or property transaction. You keep this information directly in your software of choice, or in a spreadsheet that connects to HMRC through bridging software. When it comes to proof of expenses, the good news is you don’t necessarily need to scan or upload every individual receipt. You only need accurate digital records of the transactions. That said, it’s a good idea to keep any receipts separately, in case HMRC asks for evidence of them later.

Is Making Tax Digital only for VAT?

No. MTD started with VAT, but it now also applies to income tax for sole traders and landlords, once you pass the qualifying income threshold. If your income is above the threshold, you should keep digital records, send quarterly updates to HMRC and complete a final declaration through MTD-compatible software.

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Making Tax Digital (MTD) for Income Tax and VAT

Making Tax Digital: your step-by-step guide to MTD

You may need to follow MTD rules if you earn income from self-employment or property, or if you are VAT-registered.

A potter calculates the costs of running a business.

Making Tax Digital is the new system for reporting your income, expenses and VAT to HMRC.

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Tax returns are changing. Get expert updates and practical guidance to help you get MTD-ready with confidence.

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How MTD for Income Tax works in practice

Sole trader current accounts

Find sole trader bank accounts from leading providers

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Editor's pick: HMRC-recognised MTD software

Our top pick for self-employed professionals looking to manage cash flow and digital tax obligations in one secure place.

Editor's pick

Xero

Price

From £7.00 per month

Free trial

30 days free*

Integrations

Connects to a wide range of UK and international banks via open banking feeds.

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“Xero Simple targets the specific needs of landlords and sole traders preparing for MTD. Combining HMRC-recognised compliance tools with day-to-day utility, it allows users to automate bookkeeping and track cash flow in one secure space.”

Joe Phelan

Business finance editor

“Xero Simple targets the specific needs of landlords and sole traders preparing for MTD. Combining HMRC-recognised compliance tools with day-to-day utility, it allows users to automate bookkeeping and track cash flow in one secure space.”

Joe Phelan

Business finance editor

Xero

Price

From £7.00 per month

Free trial

30 days free*

Integrations

Connects to a wide range of UK and international banks via open banking feeds.

View deal

How to get started with MTD

Here’s how you can get up and running with MTD in no time.

Check whether you qualify and when you need to start

Confirm you’re a sole trader or landlord with qualifying income above the threshold for the specific tax year.

Pick your software

Choose HMRC-recognised software that works for you and your budget. Decide between an integrated tool or a spreadsheet with bridging software. Make sure it supports quarterly updates and a final declaration, in line with MTD requirements.

Sign up with HMRC

Sign in to your Government Gateway account and sign up for MTD for income tax. Have your Unique Taxpayer Reference (UTR), National Insurance number and business email to hand to speed up this process.

Connect your software

Authorise your chosen software to access your HMRC account. Link each income source (business and/or property), check your settings and test a sample entry before your first quarterly update to make sure everything’s working as it should.