Current position: 1 September 2026. This page is for individuals trading as sole traders. A company, partnership, employee or VAT question may follow different rules.
1. Check your status and qualifying income
MTD for Income Tax applies to an individual registered for Self Assessment who has qualifying self-employment or property income above the staged threshold. For this test, add the gross turnover from all sole-trader businesses and gross property income before expenses. Do not include employment pay, pension income, dividends or a partnership profit share in qualifying income.
If 2024/25 qualifying income was more than £50,000, the mandatory start was 6 April 2026. More than £30,000 on the 2025/26 return leads to a 6 April 2027 start; more than £20,000 on the 2026/27 return leads to a 6 April 2028 start.
2. Set up each business correctly
- Create digital records for the date, amount and category of self-employment income and expenses.
- Send a separate quarterly update for each sole-trader business and each property business.
- Each quarterly update is cumulative from the start of the tax year or calendar update period, so corrected records flow into the next update.
- Check the accounting period in software before the first update. HMRC says it cannot be changed for that tax year after an update has been sent.
If a new income source begins after you have entered MTD, the start of quarterly reporting for that source can depend on when it first appears on a tax return. Use HMRC’s add-or-cease guidance rather than assuming it joins the next update automatically.
3. Take the correct next action
| Your position | Next action |
|---|---|
| You should have started on 6 April 2026 | Check your HMRC sign-up status, authorise compatible software and catch up records and quarterly updates from the start of the tax year. |
| Your start is April 2027 or April 2028 | Confirm the threshold from the relevant return, then prepare records and software before that start date. |
| You may be digitally excluded or automatically exempt | Use HMRC’s exemption guidance. Do not stop filing Self Assessment unless HMRC’s rules say you are exempt from MTD. |
| You use an agent | Agree who keeps records, sends each update, checks other income and submits the tax return. An agent can act, but the duties still need to be completed. |
Keep the tax return in view
Quarterly updates are not tax returns. After the year ends, compatible software is also used to make adjustments, claim reliefs, check or add other income and submit the tax return. Tax for 2026/27 remains due by 31 January 2028.
Primary sources
- HMRC: who needs to use MTD for Income Tax — status, income sources and start thresholds; retrieved 1 September 2026.
- HMRC: create digital records — record content and catch-up treatment; updated 16 July 2026.
- HMRC: send quarterly updates — one update per business and cumulative periods.
- HMRC: add or cease income sources — treatment of new and ceased businesses.
- HMRC: MTD for Income Tax exemptions — automatic and application-based routes; updated 28 May 2026.