Making Tax Digital for Income Tax applies to sole traders whose gross self-employment and property income is over £50,000 for 2024/25, from 6 April 2026. The limit drops to £30,000 for 2025/26 income and £20,000 for 2026/27 income.
The limit is tested against your qualifying income — self-employment plus property, before expenses — for 2024/25, 2025/26 and 2026/27 respectively.
Source: Find out if and when you need to use Making Tax Digital for Income Tax — gov.uk (opens in a new tab)Qualifying income is your income from self-employment and property before expenses, added together across every business. A low profit does not keep you under the limit.
Source: Work out your qualifying income for Making Tax Digital for Income Tax — gov.uk (opens in a new tab)Standard quarters end 5 July, 5 October, 5 January and 5 April; calendar quarters are also allowed. Each update is cumulative from the start of the tax year.
Source: Send quarterly updates — Use Making Tax Digital for Income Tax — gov.uk (opens in a new tab)HMRC issues no penalty points for late quarterly updates in the first year, 2026/27. After that, each missed update is one point and four points bring a £200 penalty. Late tax returns still attract points.
Source: Send quarterly updates — Use Making Tax Digital for Income Tax — gov.uk (opens in a new tab)Quarterly updates do not replace the tax return. After the fourth update you check whether your income needs adjusting, then finish the year-end step and pay any tax owed by 31 January.
Source: Deadline approaches for first Making Tax Digital quarterly update — gov.uk (opens in a new tab)HMRC decides using the tax return you submitted for an earlier year: 2024/25 income decides whether you start in April 2026, 2025/26 income decides April 2027 and 2026/27 income decides April 2028. If you run more than one trade, the turnovers are added together.
Income from employment, dividends and pensions does not count. Your share of partnership profit does not count either for now, because HMRC has said partnerships will join later on a timeline still to be announced. The test is "over" the limit, so exactly the threshold is not caught.
The £1,000 trading allowance does not reduce qualifying income. The regulations take each amount before any deductions, and our checker follows that. If you are close to a limit, confirm with HMRC before relying on any estimate, ours included.
Four times a year you send HMRC the totals for each income and expense category in your business, through compatible software. The deadlines are 7 August, 7 November, 7 February and 7 May. You send totals, not individual records, and you do not need to make accounting or tax adjustments first.
Each update is cumulative: it covers the period from the start of the tax year to the end of the quarter. If you find a missed expense in quarter two, the quarter-two update simply includes it. You must send an update even if you had no income or expenses in the period.
There are three routes. Keep a spreadsheet and add bridging software; use bookkeeping software that records from your bank and submits itself; or have an accountant do it. HMRC publishes a software finder and does not recommend any product.
Free products exist, mainly for simple tax affairs, and some cap what you can do. See what a few providers say on their own pages, dated, in our free MTD software comparison.
If your qualifying income is under the limit you carry on with Self Assessment. You can also join MTD for Income Tax early if you are registered for Self Assessment and have submitted a tax return in the last two years; HMRC says volunteers do not get penalty points for late quarterly updates.
ac-co's Self Assessment product is live and HMRC-recognised for the SA100, so a sole trader who is not mandated can file their SA103S there today.
ac-co Income Tax (MTD) drafts each quarterly update from the transactions in your connected bank and books, keeps the cumulative position straight across the year and shows what the quarter means for your bill. It is in open beta. Live filing of quarterly updates to HMRC is not open yet, so use software from HMRC's list for any real deadline that falls before it opens.
Prepared from your connected bank and books, for you to review.
The records behind each figure, kept digitally.
What is due, and what it means for your bill.
In open beta: drafted for you to review. Live filing to HMRC is not open yet.
Enter your gross self-employment and property income. The checker tests it against all three limits using the same engine as our eligibility calculator.
An estimate from the figures you enter, not advice. HMRC decides who is in scope, using your Self Assessment return.
Sole traders with qualifying income over £50,000 for 2024/25 had to start on 6 April 2026. The limit is £30,000 for 2025/26 income, from 6 April 2027, and £20,000 for 2026/27 income, from 6 April 2028.
Turnover. Qualifying income is your gross income from self-employment and property before expenses. The £1,000 trading allowance does not reduce it, so a sole trader with low profit can still be over the limit.
7 August, 7 November, 7 February and 7 May. Standard quarters end 5 July, 5 October, 5 January and 5 April. You can send an update from the end of its period up to the deadline.
HMRC issues no penalty points for late quarterly updates in 2026/27. After that, each missed update is one point, and four points bring a £200 penalty. Late tax returns still attract points.
Yes. Quarterly updates do not replace the tax return. You finish the year-end step and pay any tax owed by 31 January.
Not yet. ac-co Income Tax (MTD) is in open beta: it drafts the updates from your bank and books, but live filing to HMRC is not open. Join the waitlist and we will tell you when it is.
Read on 12 October 2026. HMRC changes its guidance; check the page itself for anything that may have moved since.
ac-co Income Tax (MTD) is in open beta. Join the waitlist and we will open seats in batches.