MTD for gardeners and landscapers

Do you need to use MTD for Income Tax

If you work alone or run a small gardening or landscaping firm as a sole trader, MTD for Income Tax applies once your qualifying income goes over a set figure in a tax year. From 6 April 2026 it applies to sole traders and landlords with qualifying income over 50,000 pounds in 2024-25, unless they are exempt.

The figure drops over the next two years, so more small firms come in each April.

The thresholds are set in law by SI 2026/336 regulation 27, which came into force on 1 April 2026.

How your qualifying income is worked out

Qualifying income is the total income from self-employment and property before expenses, so it is your turnover rather than your profit. It is taken from the tax return you submitted in the previous tax year.

Add your self-employment income and your property income together before you test the threshold. All UK properties are treated as one UK property business, and all foreign properties are treated as one foreign property business.

• Employment income through PAYE
• Your share of a partnership as an individual partner
• Dividends
• State and private pensions
• Qualifying care relief
• Basis period reform transition profits
• One-off transactions in UK land in a single tax year

Qualifying income of 20,000 pounds or less is an automatic permanent exemption. Partnerships are not in scope yet, and no date has been published.

Seasonal income and the four update periods

Garden and landscape work arrives in bursts, with a busy spring and summer, quieter winter months and jobs that run across the year. MTD does not smooth that out. You send four quarterly updates a year, and each one covers a full update period even if that period contains no income and no expenses at all.

You can use the standard periods, which follow the tax year from 6 April to 5 April, or calendar periods running 1 April to 31 March. The deadlines are the same either way.

You can send an update from the end of the period up to the deadline, or up to 10 days before the period ends if you expect no further transactions. The accounting period cannot be changed once the first quarterly update has been sent.

What each quarterly update contains

An update is a set of totals by income and expense category, built from your digital records and cumulative from 6 April. It is a summary, not a tax return.

The categories are the same income and expense categories used in Self Assessment, so a mowing round, a planting job and a bag of compost all land in the same headings you already use on your return. HMRC receives the category totals, not the individual transactions behind them.

• One update for each of the four update periods, whether or not you traded in that period
• Totals by category, cumulative from 6 April
• A summary rather than a tax return
• An estimate of your tax bill, which you can see in your software or in HMRC online services after each update

You can send updates more often than quarterly, but each one must cover the full update period. The fourth update may need resending for joint property expenses, or Rent-a-Room relief claimed after the tax year ends, before tax adjustments are made. The tax return is submitted after the tax year, and the tax is paid by 31 January.

Small jobs, materials and the records behind the totals

A digital record is a record of income or an expense created and stored in compatible software. Cash basis is the default method of accounting from 2024-25, and under it income and expenses are recorded when money is received or a bill is paid. You opt out if you want to use traditional accounting.

So a small job paid on the day, a deposit taken for a spring tidy-up, a run to the tip, fuel and travel costs, and a receipt for plants or paving are all records. What matters is that each one is created and stored in the software rather than written up later from a diary or a shoebox.

Keep digital records for at least 5 years after the 31 January submission deadline for the tax year, the same period as Self Assessment.

That means no writing it out in another cell or another product, and no cut and paste or copy and paste. HMRC's examples of a digital link include linked cells in spreadsheets where a formula mirrors the source value, emailing a spreadsheet containing digital records so it can be imported, transferring records on a portable device such as a memory stick for someone to import, XML and CSV import and export, and an automated transfer using an API. Other income, such as a partnership share, dividends, savings interest or pensions, can be kept digitally but does not have to be.

Signing up, and what happens if HMRC signs you up

You must be registered for Self Assessment and have submitted a tax return in the last 2 years. If you have more than one income source you sign up for each one.

Sign-up does not ask about other income sources or gains. Those are added in compatible software before the tax return is submitted. You can sign up for the current tax year or the next one before you are required to, and you still submit the Self Assessment tax return for the tax year before you start using MTD.

From September 2026 HMRC signs up anyone who needs it for 2026-27 and has not signed themselves up. It happens in stages, using only the information HMRC already holds, and the confirmation arrives in HMRC online services or by post. An identification check may be required when you sign up.

If all of your income ceased before 6 April 2026 you update your details and do not need MTD for Income Tax, but you still file the 2025-26 tax return. If it ceased on or after 6 April 2026 you still need MTD for Income Tax, and you must send a quarterly update covering the period up to the date it stopped.

Points and penalties for missed deadlines

For 2026-27 there are no penalty points for missing a quarterly update deadline. Points still apply to the tax return deadline, and digital records and updates are still required.

For tax years after 2026-27, a missed submission deadline earns one penalty point. The threshold is 4 points, then a 200 pound penalty, then a further 200 pound penalty each time another submission deadline is missed. Only one point is given per deadline, even if you run several businesses and send several late updates, and VAT penalty points are counted separately from MTD for Income Tax points.

Below the threshold, each point is removed automatically 24 months after the missed deadline. At the threshold, points are not removed automatically: you need 12 months of on-time quarterly updates and tax returns, plus sending outstanding updates and returns for the previous 24 months. Penalty points for volunteers have a lower threshold of 2 points.

Late payment penalties are not points based. They apply to each late payment but not to payments on account. In the first year you have 30 days from the payment due date to pay or arrange a payment plan, reducing to 15 days after that, and the 30-day period is available once only. If a payment plan is agreed and kept to, penalties are paused from the date HMRC was contacted. Late payment interest runs from the first day the payment is late until it is paid in full.

Where the software fits

HMRC does not provide software, and does not approve, endorse or recommend any product. For MTD for Income Tax, compatible software must create and store digital records, work with the accounting period you have chosen, and send the quarterly updates. An all-in-one product also submits the tax return.

You can use more than one product, but only one product for each separate submission, and the records must be digitally linked between them. You authorise the software so it connects to HMRC, and you repeat that every 18 months without repeating the identity check. Software defaults to an accounting period aligned to the tax year, so if your accounting period runs 1 April to 31 March you select calendar periods before the first update.

HMRC's find software service lists products that meet the requirements for the service. It does not rank them and does not carry prices.