When Does Making Tax Digital Start? Key Dates Explained

If you are self-employed or a landlord, you have probably heard the phrase "Making Tax Digital" more than a few times recently. But when does Making Tax Digital start, and what does it actually mean for your day-to-day finances? HMRC is rolling out MTD for Income Tax Self Assessment (MTD for ITSA) in phases, with the first mandatory deadline arriving in April 2026. Whether you are just becoming aware of this change or you have been tracking it for months, this guide cuts through the noise and gives you a clear picture of every important date, threshold, and action you need to take.

Making Tax Digital (MTD for ITSA)

HMRC's initiative requiring sole traders and landlords to keep digital records and submit quarterly income and expense updates, replacing the traditional annual Self Assessment tax return for those above set income thresholds.

The Short Answer: When Does Making Tax Digital Start?

Making Tax Digital for Income Tax Self Assessment starts on 6 April 2026 for sole traders and landlords whose total qualifying income exceeds £50,000 per year. This is not the first time HMRC has set a start date for MTD for ITSA. The initiative has been delayed several times since it was first announced, which has understandably left many self-employed people unsure about what is actually happening and when.

This time, the April 2026 date is legislated and HMRC has confirmed it will not be pushed back again. If you fall into the first cohort, you have until April 2026 to have compatible software in place and to understand the new quarterly reporting obligations.

For a deeper look at the 2026 deadline and everything you need to do before it arrives, see our guide on the Making Tax Digital deadline 2026: what sole traders must know.

The Full MTD for ITSA Rollout Timeline

MTD for Income Tax is being introduced in three distinct phases, each tied to a different income threshold. Here is a clear breakdown of when each phase begins and who it affects.

Phase One: April 2026 (Income Over £50,000)

From 6 April 2026, sole traders and landlords with qualifying income above £50,000 must:

• Keep digital records using HMRC-recognised software
• Submit cumulative quarterly updates to HMRC (four times a year)
• File a Final Declaration after the tax year ends to confirm their overall tax position

The quarterly updates are not full tax returns. They are summaries of your income and expenses for each three-month period. You still reconcile everything and make your final declaration after the tax year ends.

Phase Two: April 2027 (Income Over £30,000)

From 6 April 2027, the same rules extend to sole traders and landlords earning more than £30,000 per year. If you currently sit between £30,000 and £50,000 in qualifying income, this is your deadline to prepare.

The obligations are identical to those in Phase One: digital record-keeping, four quarterly submissions per year, and a Final Declaration.

Phase Three: April 2028 (Income Over £20,000)

HMRC has indicated that a third phase will bring in those earning over £20,000 from April 2028. This threshold has not yet been fully legislated at the time of writing, but the government has confirmed its intention to include this group. If your income sits between £20,000 and £30,000, you should treat this as your working deadline.

What Counts as Qualifying Income?

One question that comes up repeatedly is: what income actually counts towards the MTD threshold? HMRC defines qualifying income as the combined gross income from:

• Self-employment (sole trader income before expenses)
• UK property income (rental income before expenses)

Importantly, this is your gross income, not your profit. If you earn £55,000 from self-employment before expenses and make a net profit of £30,000, you are still in the first phase from April 2026 because your gross qualifying income exceeds £50,000.

Income from employment (PAYE), dividends, savings, and pensions does not count towards the qualifying income threshold for MTD purposes. This catches some people by surprise, particularly those who have a mix of employed and self-employed income.

Why Has MTD Been Delayed Before?

Making Tax Digital for Income Tax has had a complicated journey. It was originally planned for April 2018, then pushed back to April 2020, then April 2023, before being delayed again to the current phased rollout starting April 2026.

The delays were driven by concerns from accountants, software developers, and business groups about readiness. The Federation of Small Businesses and the Institute of Chartered Accountants in England and Wales (ICAEW) both raised concerns about the pace of change and the burden on small businesses.

HMRC responded by adopting the phased approach, giving the highest earners time to adapt first while the ecosystem of software, agents, and guidance catches up. While delays in the past have led some sole traders to adopt a "wait and see" approach, that strategy is now genuinely risky. The legislation is in place and the clock is ticking.

What Do Quarterly Submissions Actually Look Like?

One of the biggest sources of anxiety about MTD is understanding what quarterly submissions involve in practice. The good news is that they are not as complex as a full Self Assessment return.

Each quarter, you submit a summary of:

• Your total income for that period
• Your total allowable expenses, categorised by type

You are not required to submit invoices, receipts, or detailed transaction logs to HMRC. You do, however, need to keep those records digitally in case of an enquiry. The quarterly update is essentially a high-level summary, not a full audit.

The four quarterly periods under MTD for ITSA align with the tax year:

• Quarter 1: 6 April to 5 July (deadline: 5 August)
• Quarter 2: 6 July to 5 October (deadline: 5 November)
• Quarter 3: 6 October to 5 January (deadline: 5 February)
• Quarter 4: 6 January to 5 April (deadline: 5 May)

After all four quarterly updates, you complete your Final Declaration, which replaces what was previously your Self Assessment tax return.

For a more detailed breakdown of these specific dates and how they interact, read our post on MTD for Income Tax start date: key deadlines explained.

Who Is Exempt from MTD for ITSA?

Not everyone will be brought into MTD for ITSA. HMRC has confirmed certain exemptions:

• Partnerships: General partnerships are currently excluded, though HMRC has indicated they may be brought in at a later date.
• Trusts and estates: Excluded from the current plans.
• Those below the income threshold: If your qualifying income never reaches £20,000, you are not currently in scope.
• Digital exclusions: People who cannot use digital tools due to age, disability, or remoteness may apply for an exemption from HMRC.
• Certain religious groups: Those whose beliefs prevent them from using computers can apply for exemption.

It is also worth noting that if your income drops below the relevant threshold in a later year, HMRC has processes to allow you to exit MTD reporting temporarily, though the exact rules here are still being refined.

The New Penalty System You Need to Understand

Alongside MTD for ITSA, HMRC is introducing a new points-based penalty system for late submissions. Under this system:

• Each missed quarterly submission earns you one penalty point
• Once you reach a threshold of points (four for quarterly filers), you receive a £200 financial penalty
• Further missed submissions incur additional £200 penalties
• Points expire after 24 months, provided you have a period of compliance

This is a significant change from the current flat-rate penalties under Self Assessment. The new system is designed to be more proportionate, meaning occasional slip-ups are less likely to result in immediate fines. However, habitual late submission will accumulate points quickly.

For those accustomed to the current Self Assessment system with its single annual deadline, the shift to quarterly deadlines means there are now four opportunities per year to miss a submission. Getting into good habits early, ideally by using software that automates reminders and data categorisation, is the most practical way to avoid accumulating points.

How to Prepare Before Making Tax Digital Starts

Knowing when Making Tax Digital starts is only useful if you take action before the relevant date arrives. Here is a practical checklist for sole traders:

1. Check Your Income Against the Thresholds

Look at your gross self-employment and rental income (not profit) for the current and previous tax year. If you are above £50,000, April 2026 is your deadline. If you are between £30,000 and £50,000, April 2027 applies. Reassess every year, as your income may shift between thresholds.

2. Choose MTD-Compatible Software

You will need software that is recognised by HMRC for MTD submissions. Options range from full accounting platforms to purpose-built apps for sole traders. Look for something that connects directly to HMRC's systems via an API, keeps a digital record of your income and expenses, and generates quarterly summaries automatically. TapTax is built specifically for this purpose, designed for UK sole traders who want straightforward MTD compliance without the complexity of traditional accounting software.

3. Start Digitising Your Records Now

Even if your deadline is April 2027 or 2028, starting to keep digital records now means you are building habits that will make the transition effortless. Trying to adopt a completely new system in the weeks before a deadline is stressful and error-prone.

4. Speak to Your Accountant

If you use an accountant or tax agent, make sure they are aware of your MTD timeline and that they use MTD-compatible software on your behalf. Agents can submit MTD updates on behalf of their clients, but both parties need to be prepared.

5. Register for MTD with HMRC

You cannot simply start submitting quarterly updates without first signing up to MTD for ITSA with HMRC. Registration opens the MTD service for your tax account. HMRC is expected to begin mandating sign-ups closer to each phase deadline, but voluntary sign-ups are available now for those who want to pilot the system.

People also ask

When does Making Tax Digital start for sole traders?

MTD for Income Tax starts on 6 April 2026 for sole traders and landlords with gross qualifying income above £50,000. Those earning over £30,000 must comply from April 2027, and those earning over £20,000 are expected to join from April 2028.

Do I need to submit a Self Assessment tax return if I join MTD?

Under MTD for ITSA, the annual Self Assessment tax return is replaced by four cumulative quarterly updates and a Final Declaration. You still confirm your tax position annually, but the process is spread across the year rather than completed in one submission.

What happens if I miss a quarterly MTD deadline?

HMRC's new points-based penalty system means each missed submission earns you a penalty point. Once you accumulate enough points (four for quarterly filers), you receive a £200 financial penalty, with further £200 penalties for each additional missed submission.

Is Making Tax Digital for VAT different from MTD for Income Tax?

Yes. MTD for VAT has been mandatory for all VAT-registered businesses since April 2022 and is a separate programme from MTD for Income Tax. If you are already compliant with MTD for VAT, you will still need to sign up separately for MTD for ITSA when the relevant threshold and deadline apply to you.

Conclusion: Now You Know When Making Tax Digital Starts, Act Early

When does Making Tax Digital start? For the highest earners, the answer is April 2026, and that date is now firmly set. For those earning above £30,000, April 2027 is the deadline. And for sole traders earning above £20,000, April 2028 is on the horizon.

The phased approach gives most self-employed people time to prepare, but that time should be used actively rather than treating these dates as distant concerns. Choosing compatible software, digitising your records, and understanding the quarterly submission process now will make the transition smooth and stress-free. The worst outcome for any sole trader is arriving at their mandatory start date without a system in place, scrambling to comply while also running a business.

TapTax is built for exactly this situation: a straightforward, MTD-ready app designed specifically for UK sole traders who want to stay compliant without getting bogged down in accounting complexity. The earlier you start, the less disruptive the change will be.

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