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Making Tax Digital for Income Tax is the biggest change to UK tax administration in decades. From 6 April 2026, quarterly digital reporting replaces the annual self-assessment return for hundreds of thousands of self-employed people and landlords. Mandatory April 2026 Making Tax Digital — Who Is Affected and When
Source: Morningstar UK Tax Calendar 2026; HMRC Making Tax Digital guidance. The Autumn 2025 Budget confirmed MTD for ITSA launches April 2026 for income above £50,000, with penalty grace period for 2026/27. MTD Quarterly Submission Deadlines
MTD Compatible Software Options
HMRC has a full list of MTD-compatible software at gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-income-tax. You cannot use regular spreadsheets without approved bridging software. What MTD Means in PracticeBefore MTD: You recorded income and expenses throughout the year (however you wished) and filed one self-assessment return by 31 January. After MTD: You must keep digital records in MTD-compatible software throughout the year, submit a summary of income and expenses to HMRC four times per year (quarterly), and then submit a final declaration by 31 January. The quarterly submissions are informational — they do not require immediate tax payment. Payment deadlines remain: 31 January (balancing payment + first payment on account) and 31 July (second payment on account). MTD Penalties — What HMRC Has ConfirmedHMRC confirmed it will not impose late filing penalties for MTD quarterly submissions during the first year (2026/27). This is a grace period to allow businesses and landlords to adjust. However: you must still sign up for MTD and use compatible software from April 2026; late payment penalties and interest continue to apply from the start; and the penalty grace period ends April 2027 when the full penalty regime begins. Simply ignoring MTD is not a compliant approach — HMRC can issue penalties for failure to maintain digital records. KAELTRIPTON VERDICT If you earn above £50,000 from self-employment or property in 2026/27, Making Tax Digital applies to you from 6 April 2026. Start now: choose MTD-compatible software, set up your digital records, and register with HMRC. The quarterly submission penalty grace period runs through 2026/27 — but you must still comply with the digital record-keeping requirement. Those with income £30,001-£50,000 join in April 2027. Mandatory from 6 April 2026 Q: What is Making Tax Digital? A: Quarterly digital reporting to HMRC, replacing annual self-assessment for self-employed people and landlords with qualifying income above £50,000 from April 2026. Q: Who does MTD affect from April 2026? A: Self-employed people and landlords with income above £50,000. Approximately 780,000 people. Drops to £30,000 threshold from April 2027. Q: What software do I need? A: HMRC-recognised MTD software. Options include QuickBooks, Xero, FreeAgent, Sage. Free tools available for simplest cases. Regular spreadsheets need bridging software. Q: Are there MTD penalties? A: Quarterly submission penalties waived in 2026/27 (grace period). Late payment penalties and interest apply from the start. Full penalty regime from April 2027. Related Articles This article is for informational purposes only and does not constitute financial or tax advice. Always consult a qualified accountant or tax adviser for your personal circumstances. All rates and figures verified from GOV.UK and official sources, April 2026. |
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