Who this applies to, and from when
MTD for Income Tax started on 6 April 2026 for sole traders and landlords whose qualifying income is over £50,000. Qualifying income is your gross takings before expenses - self-employment turnover and any rental income added together. It is not your profit, so a busy year on modest margins can still put you over the line.
- From April 2026 - qualifying income over £50,000
- From April 2027 - over £30,000
- From April 2028 - over £20,000
HMRC works out which wave you are in from the tax return you have already filed, and writes to tell you. If you are under every threshold, self assessment carries on as before - for now.
The four quarters
| Quarter | Covers | Send it by |
|---|---|---|
| Q1 | 6 Apr – 5 Jul | 7 Aug |
| Q2 | 6 Jul – 5 Oct | 7 Nov |
| Q3 | 6 Oct – 5 Jan | 7 Feb |
| Q4 | 6 Jan – 5 Apr | 7 May |
If your bookkeeping already runs on calendar months you can elect to use calendar quarters instead (starting 1 April, 1 July and so on). The deadlines stay the same either way.
What a quarterly update actually is
Not a tax return. There is no tax to pay with it, nothing to sign, and no accuracy declaration. It is a summary of your income and expenses by category, sent straight from your software. Each update covers the year so far, so if something was miscategorised in July, the October update quietly corrects it - you do not amend the old one.
If the records already exist, an update takes minutes. That is the point of keeping them as you go.
What "digital records" means in a van
Each bit of income and each expense has to be recorded digitally, close to when it happens. In practice: the invoice you raised on your phone is already a digital record. The receipt you photographed and logged before leaving the merchant's car park is a digital record. A carrier bag of paper retyped in January is not, and neither is a diary copied into a spreadsheet at year end.
You need the date, the amount and the category for each transaction. Keeping the receipt photo attached is not compulsory, but it settles any argument later.
The year end has not moved
After the fourth quarter you finish the year with a final declaration - that is where allowances, capital allowances and any other income go, and where the actual bill is worked out. The deadline is 31 January after the tax year ends, same as self assessment always was, and the payment dates (31 January, plus payments on account) have not changed either.
So MTD changes how you keep records and how often HMRC hears from you. It does not change when you pay.
If you're late
Late quarterly updates run on a points system - a point per missed deadline, and a £200 penalty once the points add up. For 2026-27, the first year, HMRC has said it will not issue late-submission penalty points while everyone finds their feet. Do not build a habit on the light touch: it ends after the first year, and the duty to keep digital records applies from day one regardless.