MTD for Income Tax: Who's Affected from April 2026

Originally written by Josh Hall, updated by the editorial team on 14th April 2026

Who is affected and when

MTD ITSA came into force on 6 April 2026 for sole traders and landlords with more than £50,000 of qualifying income. If you fall into that bracket and have not signed up yet, you need to get moving now so your records and software are in place before the first quarterly update deadline on 7 August 2026.

Qualifying income means your gross self-employment turnover plus gross rental income before any expenses. A freelancer with £55,000 of revenue and £30,000 of expenses is in scope, even though their actual profit is £25,000.

HMRC has been writing to those it believes are in scope, but the legal obligation is on you to know whether you qualify. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. If you are not in the first wave, choose your software now and get used to digital record-keeping before your deadline arrives.

If you're new to quarterly reporting or unsure what income needs to be declared under the new system, try our free Self Assessment Helper.

Self Assessment Helper

Confused by self assessment? Tell us about your income and circumstances and get a clear guide to what you need to declare, what you can claim, and the key deadlines.

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What you have to do differently

You must keep digital records of income and expenses in MTD-compatible software. Spreadsheets are allowed only if combined with bridging software that submits data to HMRC in the right format. A pile of receipts in a shoebox no longer counts.

You must also submit quarterly updates to HMRC: first quarter ends 5 July (due 7 August), second ends 5 October (due 7 November), third ends 5 January (due 7 February), fourth ends 5 April (due 7 May). These are summary totals of income and expenses, not full accounts.

At year end, you submit your tax return through MTD-compatible software, pulling together quarterly updates, year-end adjustments, and other income. The deadline remains 31 January following the tax year. Payment dates are unchanged: payments on account on 31 January and 31 July, balancing payment on 31 January.

Your 2025/26 Self Assessment is still due by 31 January 2027 under the old regime. The first tax year going through MTD ITSA for first-wave taxpayers is 2026/27.

Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.

Software and penalties

HMRC publishes a list of MTD ITSA-compatible software on GOV.UK. Free options exist for simple cases, but most sole traders will find paid software easier. Popular options include FreeAgent, QuickBooks, Xero and Sage, typically costing £10 to £30 a month.

HMRC has confirmed there are no penalties for missing quarterly update deadlines during the 2026/27 tax year for those mandated from 6 April 2026. Late tax return and late payment penalties still apply. From later tax years, missed quarterly updates attract penalty points: four points triggers a £200 penalty, with a further £200 for each additional missed deadline.

What to do this week

Sign up for MTD ITSA via GOV.UK. Choose software from the HMRC-approved list. If you use an accountant, authorise them for MTD purposes (this is separate from standard Self Assessment agent authorisation). Set up digital record-keeping so every transaction from 6 April 2026 onwards is captured.

If you missed the 7 August deadline, file the update as soon as you can. The soft-landing period means a single late submission during 2026/27 will not produce a fine, but getting into a clean filing pattern now avoids problems when penalties start to bite.

If you are unsure whether your income meets the threshold, use the Self Assessment Helper for a personalised explanation of your filing obligations.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Self Assessment Helper lets you confused by self assessment? Tell us about your income and circumstances and get a clear guide to what you need to declare, what you can claim, and the key deadlines. Try it now →

2 questions

Ask The Tax Guide a Question

TheTaxGuide Editor 24/05/2026 at 10:25 am

@Mike Just to be clear, there isn't a specific age exemption, but HMRC does offer a "digitally excluded" exemption which can apply on grounds of age, disability, location, or other reasons making it not reasonably practicable to use digital tools. You apply by ringing HMRC on 0300 200 3700, or writing to them, explaining why you can't comply. They'll consider things like your age, your ability to use a computer, and any health issues. Worth applying in good time before April 2026, and keep a written record of what you send. If they refuse, you have a right of appeal.

Mike 24/05/2026 at 10:13 am

I am 83yrs,( DoB 25/7/42) and my wife is 80 yrs.(3/3/46) We have an Gros income from jointly owned, rented property. of around £65000 and costs of aprox £14000. which we split evenly for tax purposes. we also hav pensions.We do not employ an accountant. Annually We each lodge our separate tax returns and have paid separate income tax reliably for at least the past thirty years with no problems but I do know that MTD will give us many added problems, prove to be beyond our now ageing mental capacity and give us considerable added expenses and worry.
I note that Age exemption from MTD is offered.
My question is “How do we request such exemption.

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