>>the way Income Tax is reported to HMRC is changing for millions of people across the UK, thanks to Making Tax Digital.
Starting from April 2026, the Government is rolling out Making Tax Digital for Income Tax.
It's a big shift designed to modernise the Self Assessment process, helping people keep clearer and more accurate financial records throughout the year.
It's the biggest change to personal tax reporting since Self Assessment was introduced over 30 years ago.
Whether you're a homeowner, a landlord, self-employed, or earning extra income on the side, getting familiar with these updates now will make the transition much smoother.
This guide explains what Making Tax Digital means, why it's happening, and how you can prepare with confidence.
Making Tax Digital, a new digital approach to Income Tax
Making Tax Digital is HMRC's long-term plan to move tax reporting fully online.
Rather than pulling everything together once a year for a traditional Self Assessment submission, you'll need to keep digital records and submit quarterly updates using HMRC-recognised software.
The goal is to reduce errors, improve accuracy and transparency, and give you a clearer, more up-to-date picture of your finances.
It also helps take the pressure off that last-minute January rush, creating a more manageable routine throughout the year.
Under this new system, you'll record your income and expenses digitally, submit your figures to HMRC every three months through compatible software, and complete a year-end Final Tax Return - replacing the existing annual Self Assessment process.
who needs to join Making Tax Digital and when?
Making Tax Digital for Income Tax is being introduced gradually over several years.
Whether you need to join - and when - depends on your qualifying income, which is your gross income in the tax year.
That means your total earnings from self-employment and property before any expenses or allowances are deducted.
Here's how the rollout looks:
- April 2026: for individuals with qualifying income above £50,000
- April 2027: for individuals with qualifying income above £30,000
- April 2028: for individuals with qualifying income above £20,000
If you earn income from both property and self-employment, those figures are combined to work out whether you meet the threshold.
HMRC will get in touch with eligible individuals, but they won't sign you up automatically from the start - you'll need to register yourself before your start date.
If you've only recently started letting property or working for yourself, you don't need to start using Making Tax Digital for Income Tax until after you've submitted your first Self Assessment tax return.
That said, you can choose to sign up early if you'd prefer.
how the new digital system will work
Once you're required to use Making Tax Digital, you'll need to keep all your relevant income and expense records digitally.
Quarterly summary updates will be submitted directly through your chosen HMRC-recognised software.
These reports don't calculate your tax - they simply give HMRC a clearer picture of what you're earning during the year.
Quarterly updates are due by the 7th day of the month following the end of each quarter.
From April 2026, the deadlines for these submissions are:
- 7th August
- 7th November
- 7th February
- 7th May
At the end of the tax year, you'll complete a Final Tax Return that brings all your income sources together, applies any allowances or adjustments, and works out your final tax position.
The deadline for this stays at 31st January, just like the current Self Assessment process.
For landlords, keep separate records for each of your rental and self employment income if you have both. You’ll send separate quarterly updates for each type of income.
what these changes mean for landlords
Making Tax Digital will apply to you if your rental income forms part of a total gross income that goes above your relevant qualifying income threshold.
That includes single-property landlords, multi-property landlords, and those earning property income alongside PAYE or self-employment income.
Your rental income needs to be recorded digitally and included in your quarterly submissions and Final Tax Return to HMRC.
If you're looking to grow your portfolio, streamline your accounting, or simply get a clearer view of your rental finances, digital record-keeping can help you stay more organised.
It also makes conversations with accountants, financial planners, or mortgage advisers much more straightforward.
how to stay ahead of these changes
Even if MTD doesn't apply to you until 2027 or 2028, getting prepared early will make the transition much smoother. Here are a few practical steps you can take:
- Check your income against the thresholds: Your most recent tax return will determine your start date. If your gross income was above £50,000, you'll be part of the first phase from April 2026.
- Explore HMRC-recognised software options: There are both free and paid tools available, including bridging software for spreadsheet users. Trying out a few options early can help you find something that works for you.
- Build digital habits: Keeping your records up to date throughout the year will make quarterly submissions much easier and reduce the chance of mistakes.
- Keep income sources clearly separated: If you're both a landlord and self-employed, you'll need to report each income stream separately under MTD. Getting that organisation in place now will save you time later.
Making Tax Digital - your questions answered
Do I still need to submit a Self Assessment return?
During your transition year, yes. After that, Making Tax Digital replaces the annual Self Assessment with quarterly updates and a Final Tax Return.
Can I still use spreadsheets?
Yes, as long as you use bridging software that digitally links your spreadsheet to HMRC's system.
Is Making Tax Digital definitely happening in 2026?
Yes, the Government has reconfirmed the April 2026 start date, with no further delays announced.
What happens if I miss a quarterly deadline?
You could face penalties similar to the current Self Assessment system, so it's important to stay on top of your updates.
Does Making Tax Digital apply if I only rent out one property?
Yes - if your total qualifying income goes above the threshold for your start date. Landlords need to keep digital records and report property income quarterly to HMRC.
As Making Tax Digital begins its phased rollout, staying informed and organised will make the transition much smoother. While quarterly digital reporting might feel like a big change, the aim is to create a clearer, more modern, and more manageable way of handling your tax affairs.
If you would like to find out more about how to ease the burden of Making Tax Digital through our tax service, then contact your local branch.
Any information provided to you does not count as tax advice and this article is not definitive tax guidance. If you need assistance or are unsure about any detail in this article, we strongly recommend you speak to your accountant or a professional tax advisor.
Correct at the time of publishing – 4th March 2026