MTD Income Tax: don't panic โ here's what's actually true
Making Tax Digital for Income Tax gets talked about like a cliff edge. It isn't. Here's the actual mechanism โ who it applies to, what it asks you to send, the real dates, and the real cost of getting something wrong โ with every figure cited to its source so you can check it yourself.
Who's in
You're mandated in phases, by a threshold on your qualifying income measured in an earlier tax year:
| Qualifying income measured in | Threshold | Mandated from |
|---|---|---|
| 2024-25 | over ยฃ50,000 | 6 April 2026 |
| 2025-26 | over ยฃ30,000 | 6 April 2027 |
| 2026-27 | over ยฃ20,000 | 6 April 2028 |
This schedule is set in law: SI 2026/336 reg 27.
The gotcha: Whether you're in is worked out on your GROSS turnover โ self-employment income plus UK property income, added together before you deduct a single expense. A sole trader with a big turnover and small profit is judged on the turnover figure, not the profit.
What you actually send
Each quarterly update is cumulative โ it covers everything from the start of the tax year to the end of that update period, not just the last three months. Category totals only; no transaction-level detail crosses to HMRC, and no accounting adjustments are made at this stage.
That cumulative design has a practical upside: miss one, the next one heals it. A late or wrong update is corrected by resending the year-to-date figures in the next update โ there is no separate amendment process to learn.
Cumulative reporting was introduced by the Income Tax (Digital Requirements) (Amendment) Regulations 2024: SI 2024/167.
The deadlines
Four quarterly updates a year, standard (6th-of-month) election shown below โ the calendar-quarter election shifts the period edges but not the deadlines.
| Quarter | Period covered | Deadline |
|---|---|---|
| Q1 | 6 April 2026 โ 5 July 2026 | 7 August 2026 |
| Q2 | 6 April 2026 โ 5 October 2026 | 7 November 2026 |
| Q3 | 6 April 2026 โ 5 January 2027 | 7 February 2027 |
| Q4 | 6 April 2026 โ 5 April 2027 | 7 May 2027 |
The 31 January return deadline for the full year sits after all four โ unchanged by any of this.
The penalty truth
No penalty points for late quarterly updates in 2026-27 (Autumn Budget 2025 easement). Late payment penalties still apply: 3% at day 15 + 3% at day 30 + 10%/yr from day 31. The 31 January return deadline is unchanged.
Read both halves of that: the easement removes points for LATE quarterly updates only. It changes nothing about paying what you owe on time.
Angry about MTD? Here's who decided โ and how to say so.
What it costs elsewhere vs here
Commercial MTD software is usually a paid monthly subscription. TaxSorted is free, and the code that produces every figure on this site is open โ AGPL-3.0 licensed, published on GitHub. If you don't trust a number, go read the function that made it.
github.com/cambridgetcg/taxsorted.ioWhat to do this month
- 1.Check eligibility โ enter your gross self-employment and UK property income and see whether, and from when, the mandate applies to you.
- 2.Start your records โ a local-first ledger sorted into HMRC's own MTD categories, ready whenever you are.
- 3.Note the date: the first quarterly update deadline of the 2026-27 tax year falls on 7 August 2026, if you're mandated in.
Signing up itself stays manual, directly with HMRC โ no software can enrol you. Sign up for Making Tax Digital for Income Tax on GOV.UK.