What Making Tax Digital means
Making Tax Digital for Income Tax changes how landlords and sole traders report to HMRC. Instead of one tax return a year, you keep digital records in compatible software, send a short summary every three months, and then finish the year with a tax return through the same software. The quarterly updates are totals by category. HMRC doesn't see individual receipts.
Who's in, and when
| Qualifying income in | Over | You start |
|---|---|---|
| 2024/25 | £50,000 | 6 April 2026 |
| 2025/26 | £30,000 | 6 April 2027 |
| 2026/27 | £20,000 | 6 April 2028 |
Qualifying income is your turnover from self-employment and property added together, before expenses. A landlord collecting £32,000 of rent with £20,000 of costs still has £32,000 of qualifying income. For property you own jointly, only your share counts, so a couple splitting £50,000 of rent equally each have £25,000.
Employment income, pensions, dividends and your share of partnership profits don't count towards the threshold.
Worked example
A landlord had £29,000 of rent in 2024/25, £32,000 in 2025/26 and £33,000 in 2026/27. The 2024/25 figure is under £50,000, so April 2026 doesn't apply. The 2025/26 figure is over £30,000, so they start on 6 April 2027. Their first quarterly update is due on 7 August 2027 and their first Making Tax Digital tax return on 31 January 2029.
The quarterly deadlines
| Quarter | Covers | Due |
|---|---|---|
| 1 | 6 April to 5 July | 7 August |
| 2 | 6 July to 5 October | 7 November |
| 3 | 6 October to 5 January | 7 February |
| 4 | 6 January to 5 April | 7 May |
You can choose calendar quarters (1 April to 30 June and so on) instead, with the same deadlines. The tax return and any tax due stay at 31 January after the tax year.
Penalties
Each missed deadline earns one penalty point. At 4 points you pay a £200 penalty, and another £200 for each further missed deadline until you reset the points with a year of on-time submissions. Points below the threshold expire after 24 months. HMRC won't give points for late quarterly updates in the 2026/27 tax year, the first year of the scheme.
Late payment is separate. For 2026/27, tax unpaid 15 days after it's due attracts a 3% penalty, another 3% at 30 days, then a daily charge at 10% a year.
Questions landlords ask
Is qualifying income before or after expenses?
Before. It's your total turnover from self-employment and property, before any expenses are taken off.
I own a rental jointly. What counts?
Only your share of the rental income counts towards your threshold. Set the share box in the checker to your percentage.
Does my salary count?
No. Employment income, pensions, dividends and partnership profits are ignored when HMRC decides whether you're in. You still report them on your tax return as usual.
Do I still do a tax return?
Yes. After the fourth quarterly update you complete the tax return, sometimes called the final declaration, through your software by 31 January after the tax year.
Can I get an exemption?
Some people can, for example if they can't use digital tools because of age, disability or where they live. You have to apply to HMRC.
Is there free software?
HMRC says free products exist for people with simple tax affairs, usually with limits such as the number of transactions. Use HMRC's software finder to compare options.
Sources
- GOV.UK: Find out if and when you need to use Making Tax Digital for Income Tax
- GOV.UK: Work out your qualifying income
- GOV.UK: Send quarterly updates
- GOV.UK: Penalties for Making Tax Digital for Income Tax
- GOV.UK: Choose the right software
Last updated 1 October 2026.