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Making Tax Digital for Income Tax is a new way for sole traders and landlords to doÌýSelf Assessment. Ìý

You only need to use Making Tax Digital for Income Tax if you:ÌýÌý

• are already registered forÌýSelf AssessmentÌýand haveÌýsubmittedÌýa tax returnÌý

• get income from self-employment as a sole trader or property as a landlord, or both Ìý

When you may need to use Making Tax Digital for Income Tax depends on your qualifying income.ÌýÌý

Qualifying income is your turnover from self‑employment and property income. This is the total amount before expenses, based on the tax return youÌýsubmittedÌýin theÌýpreviousÌýtax year.Ìý

Making Tax Digital for Income Tax is being introduced in stages. The following table explains whenÌýyou’llÌýneed to start using it.Ìý

When to start using Making Tax Digital for Income TaxÌý

Before you use this guide, make sureÌýyou’veÌýfollowed the steps to sign up for Making Tax Digital for Income Tax.Ìý

Steps to complete before you use this guideÌý

1. Check if you need to use Making Tax Digital for Income Tax (this includes working out your qualifying income and checking if you are exempt).Ìý

2. Get compatible software — you can use our tool to check software you already use or find new software.Ìý

3. Sign up for Making Tax Digital for Income Tax.Ìý

IfÌýyou’reÌýan agent, make sure you have also:Ìý

• created an agent services accountÌý

• added your client authorisations for Making Tax Digital for Income TaxÌý

If you have not completed these steps,Ìýit’sÌýimportant to read the step by step that applies to you:Ìý

• sole traders and landlords step by stepÌý

• agents step by stepÌý

What’sÌýstaying the sameÌý

Some things in Making Tax Digital for Income Tax are the same asÌýyou’reÌýused to inÌýSelf Assessment.Ìý

You still:Ìý

• submit one tax return every tax yearÌý

• pay your tax bill as you do nowÌý

You must still doÌýbothÌýby 31 January following the end of the tax year.Ìý

What’sÌýnewÌý

You need to do new things for Making Tax Digital for Income Tax, such as:Ìý

• use compatible softwareÌýÌý

• create digital records of your self-employment and property incomeÌý

• send quarterly updatesÌýevery 3 monthsÌý

• add any other income sources you have and thenÌýsubmitÌýyour tax return using your softwareÌý

• understand changes to penaltiesÌý

This guide explains how to do these things and what you need to know.ÌýÌý

Some of the terms used to describe what you need to do for Making Tax Digital for Income Tax may be new to you. This section explainsÌýwhat they mean and key information.Ìý

Use compatible softwareÌý

HMRC does not provide software, but there is information about theÌýdifferent typesÌýof software and how toÌýchoose the right software for Making Tax Digital for Income Tax. You can also use our software finder tool — all software listed on the tool has been through HMRC’s recognition process.Ìý

You can chooseÌýan all-in-one software product to create digital records, send your quarterlyÌýupdatesÌýandÌýsubmitÌýyour tax return, or you can choose more than one product.Ìý

For example, if you use spreadsheets for your records, you can continue to use them. ButÌýyou’llÌýstill need software that links to your spreadsheets (sometimes called bridging software). This is howÌýyou’llÌýsend quarterly updates andÌýsubmitÌýyour tax return.Ìý

Your softwareÌýwill have toÌýdo everything you need — thisÌýalsoÌýmeans being able to add any other income sources you have before youÌýsubmitÌýyour tax return.ÌýÌý

Using software meansÌýyou’llÌýbe able to store and transfer your records securely.Ìý

Create digital recordsÌý

A digital record is a record of your income or expense that’s created and stored using softwareÌýcompatible with Making Tax Digital for Income Tax.Ìý

You only need to create digital records for your self-employment and property income.ÌýÌý

When you create a record,Ìýyou’llÌýneed the:Ìý

• amountÌý

• date income was received or expenses occurredÌý

• category of your income or expense (using the same categories as you would forÌýSelf Assessment)Ìý

Keeping digital records using software letsÌýyou view your up-to-date cash flow to help support your business.Ìý

It also helpsÌýyou toÌýidentifyÌýany mistakes early.Ìý

Send quarterly updatesÌýÌý

Quarterly updates are totals of your self-employment and property income and expenses. They are summaries, not tax returns.Ìý

Your software usesÌýyour digital records to create the quarterly updates.Ìý

YouÌýneed to send quarterly updates every 3 months during the tax year for each sole trader business and property business you have.Ìý

When you send quarterly updates,Ìýyou’llÌýbe able to see your predicted tax bill. This can help you to:Ìý

• make more informed decisions for your businessÌý

• get your tax rightÌý

Submit your tax returnÌýÌý

Your software will show your self-employment and property income and expenses for the whole tax year, for each business that you have.Ìý

Once you check this, you may find you need to amend or update some of the information.Ìý

If HMRC already has information about your other sources of income and gains, we will add this to your tax return.ÌýYou’llÌýneed to check them and add any other income sources you have, such as savings or dividends.Ìý

You also need to use your software to record any reliefs or allowances, such as capital allowances or Rent-a-Room relief.Ìý

You’llÌýthenÌýsubmitÌýyour tax return using your software.Ìý

Avoid penaltiesÌý

NewÌýpenalties replace the current late filing andÌýlate paymentÌýpenalties.Ìý

IfÌýyou’reÌýlate sending a quarterly update orÌýsubmittingÌýyour tax return, you will not get a penalty straight away. Instead,Ìýyou’llÌýget a penalty point. If you reach the point threshold,Ìýyou’llÌýget a penalty.ÌýThisÌýmeansÌýyou’llÌýavoid a penalty if you make a one-off mistake.Ìý

We will not apply penalty points for late quarterly updates for the 2026 to 2027 tax year. You still need to send your quarterly updates before youÌýcanÌýsubmitÌýyour tax return.ÌýÌý

IfÌýyou’reÌýlate paying your tax bill,Ìýyou’llÌýgetÌýa late paymentÌýpenalty.ÌýThe newÌýlate paymentÌýpenalties are more proportionate to how long it takes you to pay what you owe.ÌýThe sooner you pay, the lower the penalty.Ìý

When you need to start creating digital records for your quarterly updates depends on your accounting period.Ìý

If your accounting period ends on 5 AprilÌý—Ìýyou’llÌýuseÌýstandard update periods andÌýneed toÌýcreateÌýdigital records from 6 April.Ìý

If your accounting period ends on 31 MarchÌý—Ìýyou’llÌýuseÌýcalendar update periodsÌýandÌýneed to keep digital records from 1 April.Ìý

There is information about checking your accounting period in your software in the next section —ÌýGet your software ready.Ìý

There is also information about the dates each quarterly update covers based on your accounting period inÌýSend quarterly updates.ÌýÌý

This table explains what you need to do and when you need to do it by for Making Tax Digital for Income Tax starting from April 2026.Ìý

Before you start using Making Tax Digital for IncomeÌýTaxÌýyou’llÌýneed toÌýget your software ready.