What is MTD for Income Tax?
MTD for Income Tax is the part of Making Tax Digital that makes sole traders and landlords keep digital records and send quarterly updates to HM Revenue and Customs through compatible software. It started on 6 April 2026 for qualifying income over £50,000 and extends to income over £30,000 in April 2027 and over £20,000 in April 2028.
Also calledMTD ITSAMaking Tax Digital for Income Tax
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- Started
- 6 April 2026, over £50,000
- Next
- 6 April 2027, over £30,000
- Then
- 6 April 2028, over £20,000
How MTD for Income Tax works
Qualifying income is gross income from self-employment and property, before expenses, in an earlier tax year: over £50,000 in 2024 to 2025 means starting on 6 April 2026, over £30,000 in 2025 to 2026 means 6 April 2027, and over £20,000 in 2026 to 2027 means 6 April 2028. Each business keeps digital records and sends a summary of income and expenses every quarter, then files the tax return by 31 January after the tax year. Accounting software keeps the records and sends the updates; bridging software connects records kept in spreadsheets. No penalty points are given for late quarterly updates in the 2026 to 2027 tax year, but the updates must be sent before the return. Accountants send updates for clients through an agent services account.
Common questions
Is there free MTD for Income Tax software?+
Yes. HM Revenue and Customs lists free products, including Clear Books Free, Coconut Free and Pandle, and FreeAgent is free for NatWest, RBS, Ulster Bank and Mettle customers.
Can I keep using a spreadsheet for MTD for Income Tax?+
Yes, with bridging software that connects the spreadsheet to HM Revenue and Customs and sends the quarterly updates. Coconut, Hammock and Pandle are listed as bridging software.
Are there penalties for late quarterly updates?+
Not in the 2026 to 2027 tax year: no penalty points are given for late quarterly updates, but they must be sent before the tax return. Points-based penalties for missed quarterly deadlines start from the 2027 to 2028 tax year.
Does HM Revenue and Customs recommend any MTD software?+
No. It lists compatible software but does not recommend any product or software provider.
MTD for Income Tax software
Every product below is listed in HM Revenue and Customs' software finder for MTD for Income Tax.
XeroCloud accounting for small businesses with a large app ecosystem.Profile →
Intuit QuickBooksSmall business accounting covering books, invoicing and payroll.Profile →More MTD for Income Tax software
Part of Accountio’s accounting technology coverage · Glossary
