Making Tax Digital for Income Tax: who needs it, and when
If you are a sole trader or a landlord, Making Tax Digital for Income Tax changes how you keep records and what you send HMRC during the year. This page sets out the thresholds, the dates, and what actually changes in practice — then how eTax AI deals with it for you.
The thresholds and dates
Whether you are caught depends on your qualifying income — your gross income from self-employment and property, added together, before expenses. It is turnover, not profit, which catches people out.
| From | Qualifying income over | Status |
|---|---|---|
| 6 April 2026 | £50,000 | In force now |
| April 2027 | £30,000 | Announced |
| 6 April 2028 | £20,000 | Announced — based on your 2026/27 qualifying income |
So a sole trader turning over £60,000, or a landlord with £52,000 of rents, is already inside the regime. Someone with £35,000 joins in April 2027. HMRC has estimated around 780,000 people joined from April 2026, with a further 970,000 following in 2027.
Adding two incomes together
This is the trap worth checking. £30,000 of self-employment plus £25,000 of rent is £55,000 of qualifying income — over the threshold, even though neither source reaches it alone.
What actually changes
- Digital records. Your income and expenses must be kept digitally in software that HMRC recognises. A shoebox of receipts and a spreadsheet at the year end no longer meets the requirement.
- Quarterly updates. You send HMRC a summary of income and expenses four times a year. They are cumulative summaries, not four mini tax returns, and no tax is calculated or payable at that point.
- The tax return still happens. You still finalise the year and file by the following 31 January, and the tax payment dates are unchanged.
Exemptions
If you genuinely cannot use digital tools — for reasons of age, disability, location or religious observance — you can apply to HMRC for an exemption. It is an application, not a box you tick, and simply preferring paper is not a ground.
How eTax AI handles it
MTD is mostly an admin problem: keeping records digital all year, and remembering four extra deadlines. That is exactly the part we automate.
- Records stay digital without you doing data entry. Photograph a receipt or forward it by WhatsApp and it is read, categorised and reconciled against your bank.
- We prepare and file the quarterly updates from the books as they stand, and chase you only for the things genuinely missing.
- A chartered accountant reviews anything material before it goes to HMRC. The AI does the volume; the judgement stays human.
- Nothing for you to buy or learn. The digital record-keeping is part of the plan — see the FAQ.
MTD quarterly filing is a defined add-on rather than a hidden cost — currently a defined add-on for the quarterly updates, with the Self Assessment return itself at a fixed annual fee. The quote builder shows exactly what your total would be before you commit.
Build your quote →Where these figures come from
The thresholds and dates above are HMRC's own, published on GOV.UK. If you want to check your own position directly, HMRC's guidance find out if and when you need to use Making Tax Digital for Income Tax walks through it. This page is general information, not advice on your particular circumstances — for that, ask us.