Starting or Stopping an Income Source Under MTD for Income Tax

A new income source does not always start quarterly reporting immediately

HMRC added dedicated guidance in July 2026 for people using Making Tax Digital for Income Tax who start or cease a self-employment or property income source. The detail matters because the answer is not simply “start another quarterly update next month”.¹

If you start a new self-employment or property income source, HMRC says you normally start creating digital records and sending quarterly updates for it after you have submitted a tax return that includes it for the first time. You can choose to report it through MTD earlier, from the date it starts.²

What counts as a new source?

The guidance is specifically about a new self-employment or property income source. For a landlord, taking on another UK property does not create a new source if they are already a UK landlord: HMRC treats UK properties as one UK property business. The position can be different when the whole existing property business has ended and a new one later begins.³

Partnership, limited-company and employment income are not added as a new self-employment or property source in this MTD process. They may still need to be included in the person’s tax return.⁴

The four steps for a new source

HMRC’s sequence is straightforward, but it needs coordination between the taxpayer, agent and software:

1. Check that the software can report the new source.
2. Add it in the HMRC online services account, or the agent services account when an agent is acting.
3. Provide the source details, including its start date. For property income, that is when rental income started.
4. After filing the first tax return that includes the source, start its digital records and quarterly updates — unless you elect to begin MTD reporting sooner.⁵

HMRC gives a useful example: a person already required to use MTD who starts a new source on 1 July 2026 includes it for the first time in their 2026/27 tax return, due by 31 January 2028. They then start MTD records and quarterly updates for that source from 6 April 2028, unless they opt in earlier.⁶

If a business or property source stops

Tell HMRC through the online services or agent services account when a source ceases. If only one source has stopped, complete the outstanding quarterly updates that cover the active period. For example, HMRC says that a source ending in May 2026 still needs the update due by 7 August 2026, but no later quarterly updates for that source are needed.⁷

When all self-employment and property sources have ceased, the final update must cover the period containing the cessation date, and the income still goes into the tax return for that year. After that tax year, MTD for Income Tax is no longer required, although records must still be retained to support the return.⁸

Keep the operational record clear

For every change, record the start or cessation date, the relevant HMRC account action, and whether the software has refreshed the source. HMRC specifically advises checking that a newly added source appears in the software; it may need to be refreshed before quarterly updates can be sent.⁹

That small control helps prevent two common problems: leaving a closed source active in a workflow, or quietly omitting a new one from the figures used to prepare the annual tax return.