Making Tax Digital for Income Tax: what’s next for you, and who joins in April 2027

Making Tax Digital for Income Tax (MTD) is now live. Since 6 April 2026, sole traders and landlords with qualifying income over £50,000 have had to keep digital records and send HMRC quarterly updates through compatible software. Two quarterly updates are already behind us; the next is due on 7 February.

Who’s in now?

Your “qualifying income” is your gross self-employment and property income added together, before expenses. It’s based on an earlier tax return, so HMRC will usually have written to tell you you’re in. If you’re over £50,000 and haven’t heard, talk to us.

What are the deadlines?

Each tax year has four quarterly updates:

• 6 April to 5 July: due 7 August
• 6 July to 5 October: due 7 November
• 6 October to 5 January: due 7 February
• 6 January to 5 April: due 7 May

After the year ends, you still finalise your figures and claim reliefs by 31 January, as now. The quarterly updates don’t create a tax bill on their own.

Who joins next?

From 6 April 2027 the threshold drops to £30,000, and from 6 April 2028 to £20,000. If your income is anywhere near those figures, this winter is the time to get ready.

Landlords, take note

April 2027 also brings higher income tax rates on property income, announced in the October Budget. If you’re a landlord joining MTD next year, it’s worth reviewing your records and how your property is held at the same time.

What should you do now?

• Choose software that works for MTD, and that you (or we) are comfortable using.
• Keep a separate bank account for the business or rental income if you don’t already.
• Record income and expenses as you go, not at the end of the quarter.
• Keep receipts and invoices digitally and match them to your records.
• Decide whether you’ll file the updates yourself or want us to do it.

How we can help

We can set you up on the right software, keep your bookkeeping up to date, and send each quarterly update for you, so the year end isn’t a scramble. If you’re joining in April 2027, talk to us now and we’ll get you ready in good time.

Get in touch with the team at Alexander Myerson