Making Tax Digital is HMRC’s new way of doing tax for sole traders and landlords. From 6 April 2026, anyone earning over £50,000 a year from self-employment or property has to follow the new rules. From April 2027 the threshold drops to £30,000. From April 2028 it drops again to £20,000. So most self-employed people and landlords will be in it within two years.
If you are not sure whether the rules apply to you, the rest of this article walks through it.
We are a chartered accountancy firm in Belfast and most of our clients are sole traders, landlords, or limited companies operating in Northern Ireland. The advice below is technically accurate as of May 2026 and reflects HMRC’s published guidance. If your situation is unusual, ask. The thresholds and rules are clear; the scenarios people actually find themselves in often aren’t.
What “MTD 2026” actually means
“Making Tax Digital” (MTD for short) is the name HMRC uses for moving UK tax filing online. The phrase has been around since 2015.
You may have come across MTD for VAT, which has been compulsory for VAT-registered businesses since April 2022. The new wave is for income tax. Sometimes you will see it called MTD ITSA (which stands for Making Tax Digital for Income Tax Self Assessment). It means the same thing.
What changed on 6 April 2026 is the second wave: Making Tax Digital for Income Tax Self Assessment, usually shortened to MTD ITSA. From that date, sole traders and landlords with combined gross income from self-employment and property above £50,000 must:
- Keep digital records of their income and expenses, using HMRC-compatible software.
- Submit a quarterly update to HMRC through that software, four times a tax year.
- Submit a final declaration after the tax year ends, replacing the traditional Self Assessment return.
Note: this only applies to sole traders, individual landlords, and partners with the right kind of income. Limited companies, partnerships, and trusts are not in scope yet, and no MTD ITSA implementation date has been published for them. We’ll come to who’s affected in a moment.
The threshold staircase: £50k, £30k, £20k
MTD ITSA rolls out in three waves, by income band:
| From | Threshold | Cohort |
|---|---|---|
| 6 April 2026 | £50,000+ | The first cohort, mandated now |
| 6 April 2027 | £30,000+ | The £30k cohort joins |
| 6 April 2028 | £20,000+ | The £20k cohort joins |
A few things matter about these numbers.
The threshold is your turnover, not your profit. It is the total income before you take off any expenses. A landlord with £45,000 of rent in a year and £15,000 of expenses (mortgage interest, repairs, agent fees) is at £45,000, not £30,000. They are not in for April 2026, but they will be in from April 2027.
It combines self-employment and property income. If you have £30,000 from a sole-trade business and £25,000 from a buy-to-let, your total is £55,000 and you were in scope from 6 April 2026, even though neither income source was over £50k on its own.
HMRC tests you on last year’s tax return. For the April 2026 wave, they look at your 2024-25 return (the one filed by 31 January 2026). For April 2027, they will look at your 2025-26 return. So you usually find out whether you are in months before the wave starts.
The threshold is not optional. If you’re over it, you must comply. There is no way to opt out by choice.
The dates that actually matter
The launch dates are the headlines. The dates that affect your week-by-week life are the quarterly update deadlines and the final declaration. (For the full picture alongside everything else in the NI tax year, see our key tax dates for NI businesses.)
For the 2026-27 tax year, the calendar looks like this:
| Period | Period covers | Update due |
|---|---|---|
| Q1 | 6 April 2026 – 5 July 2026 | 7 August 2026 |
| Q2 | 6 July 2026 – 5 October 2026 | 7 November 2026 |
| Q3 | 6 October 2026 – 5 January 2027 | 7 February 2027 |
| Q4 | 6 January 2027 – 5 April 2027 | 7 May 2027 |
| Final declaration | 6 April 2026 – 5 April 2027 | 31 January 2028 |
Each year follows the same pattern. The quarterly periods are fixed and don’t shift with your accounting period.
The quarterly update is a summary of your income and expenses for the period, broken down by income source. It is not a precise tax calculation; HMRC explicitly accepts that quarterly figures may need correction at the final declaration. But it is mandatory, and there are penalties for late or missing submissions.
Who is in scope right now (April 2026 cohort)
You are in scope from 6 April 2026 if all of the following are true:
- You are an individual (not a limited company)
- You had gross income from self-employment, property, or both, of more than £50,000 in the 2024-25 tax year
- That income was reported on your 2024-25 Self Assessment return
If you only became self-employed or started receiving property income during 2025-26, you may not be in this first cohort because HMRC bases the test on your prior year’s return. You may join later.
Some examples that are in:
- A self-employed plumber in Belfast with annual turnover of £85,000 (gross, before expenses).
- A landlord with three buy-to-let properties producing combined rental income of £52,000 a year.
- A consultant earning £30,000 from a sole-trade practice plus £25,000 in rental income, totalling £55,000 gross.
Who is not in scope
The following are not affected by MTD ITSA in any wave currently announced:
- Limited companies. Corporation tax is on a different track. MTD for Corporation Tax has been discussed for years but no implementation date is set.
- Partnerships. Originally scheduled for MTD ITSA from April 2025, then deferred. No new date confirmed.
- Trusts and estates. Out of scope.
- PAYE-only earners. If your only income is from employment, no change.
- Dividend-only income. If you take a salary and dividends from your own limited company, the company is taxed under corporation tax and any dividends are reported on a Self Assessment return that is not yet within MTD ITSA, because dividends do not count as self-employment or property income.
There are also a few specific exemptions, including for individuals who are unable to use digital tools because of age, disability, or remote location without reliable internet. Exemption is not automatic; you have to apply.
What “in scope” means in practice
Three things change.
Digital records. You must keep your income and expense records digitally. The shoebox of receipts, the bank statement annotated by hand, the spreadsheet you only update at year end: none of those meet the rules on their own. Records must be created and stored in software that connects to HMRC, or in a spreadsheet that connects through “bridging software”.
Quarterly updates. Every three months, you submit a summary of your income and expenses to HMRC, broken down by income source. The submission is short and not a final tax calculation, but it must be on time and accurate to the records you keep.
Final declaration. At the end of the tax year, you submit a final declaration that confirms your full position, including any year-end adjustments and reliefs. This replaces the Self Assessment return for in-scope individuals. The deadline is the same as before: 31 January following the tax year end.
You will need software. We currently recommend Xero for clients with active businesses, FreeAgent for sole traders with simpler needs, Hammock or Landlord Vision for property-only landlords, and bridging software for clients who would rather keep working in spreadsheets. For each MTD client we set the software up, train you on the parts you actually need, and handle the quarterly submissions.
Your first quarterly deadline: 7 August 2026
For the April 2026 cohort, the first quarterly update covers 6 April to 5 July 2026 and is due by 7 August 2026.
If you are reading this and you are in scope but not yet set up, the priorities in order are:
- Confirm you’re in scope. Check your 2024-25 Self Assessment return, sum your gross self-employment and property income, and compare to £50,000.
- Choose your software. HMRC publishes a list of compatible products. We can help with selection.
- Sign up for MTD. This is a separate step from filing; you have to actively sign up at gov.uk.
- Get your records up to date. Anything from 6 April 2026 onwards needs to be in the digital format that the software accepts.
- File the Q1 update by 7 August 2026.
The penalty regime is points-based: each missed quarterly update earns one point; once you reach four points (for quarterly filers), a £200 penalty applies. Points do not stack indefinitely; they expire after a clean compliance period. But the first deadline is the easiest one to miss because the rules are new.
What’s coming next: April 2027 and April 2028
If you are not in the April 2026 cohort, you may still be in the next two waves.
April 2027 (£30,000+ cohort). Anyone with combined gross self-employment and property income over £30,000 in 2025-26 will be mandated from 6 April 2027. This is a much bigger cohort than the £50k wave; in our experience, more clients fall into the £30-50k band than above £50k.
If you might be affected, the time to start preparing is now, not next year. Software, records, and habits all take longer than people expect to embed.
April 2028 (£20,000+ cohort). The threshold drops again on 6 April 2028, bringing in another large band of self-employed and landlords. Some commentators expect this to slip again, as the £30k and £20k thresholds were originally scheduled earlier and were both deferred. Our planning assumption is that it will go live as published, because every previous threshold did, eventually.
The £20,000 threshold is, on the current trajectory, where MTD ITSA stops. Income below £20,000 is currently outside the programme and HMRC has not announced a further wave.
For the detail specific to NI sole traders and landlords, see our companion guide: Making Tax Digital for Income Tax: what NI sole traders and landlords need to do.
Frequently asked questions
When does Making Tax Digital actually start? For the £50,000+ cohort, it started on 6 April 2026. The first quarterly update is due 7 August 2026. The £30,000 cohort joins on 6 April 2027 and the £20,000 cohort on 6 April 2028.
What is the MTD threshold? The threshold is gross combined income from self-employment and property, before any expenses, as shown on your most recent Self Assessment return. £50,000 from April 2026, £30,000 from April 2027, £20,000 from April 2028.
Do I have to comply if my income is just above £50,000? Yes. There is no soft margin. £50,001 of gross combined income brings you in.
What if my income drops below the threshold? You can apply to leave the MTD ITSA scheme if your gross income falls below the threshold for three consecutive tax years. In practice, that is a four-year process: you have to be below the threshold and then file under MTD for those three years before you can exit.
Are limited companies in scope? Not yet. Limited companies are taxed under corporation tax, which is a separate regime. MTD for Corporation Tax has been mooted for years but has no published implementation date.
What’s the deadline for my first quarterly update? For the April 2026 cohort, the first quarterly update covers 6 April to 5 July 2026 and is due by 7 August 2026. Each subsequent quarter follows the same one-month-and-seven-days pattern: 7 November, 7 February, 7 May.
Do I still need to file a Self Assessment return? For the tax year 2025-26, yes: you file a normal Self Assessment return by 31 January 2027 covering the period before MTD started for you. From 2026-27 onwards, MTD replaces Self Assessment for in-scope individuals: four quarterly updates and a final declaration take the place of the single annual return.
Can I keep using spreadsheets? Yes, but only if the spreadsheet connects to HMRC through approved bridging software, and the records meet the digital record-keeping rules. Pure-spreadsheet solutions without bridging software are not compliant.
Talk to us about MTD
If you are in scope, near the threshold, or unsure where you stand, we set MTD up for clients across Northern Ireland. We choose the software that fits your business, configure your records, and handle every quarterly update on your behalf. The first conversation is free and we’ll tell you exactly where you stand and what it costs.
Contact us or call 028 9508 4138.