Placeholder article — to be rewritten with verified HMRC source citations before launch.

Making Tax Digital (MTD) for Income Tax is HMRC’s plan to move sole-trader and landlord tax reporting out of a once-a-year self-assessment submission and into a continuous, software-driven flow. If you earn income from self-employment or property, MTD will eventually affect you. Here is what you need to know.

Who is affected?

MTD Income Tax applies to individuals with qualifying self-employment or property income who file a self-assessment return. The “qualifying income” threshold is set by HMRC. From 6 April 2026 the obligation starts for taxpayers with annual qualifying income above £50,000; from April 2027 the threshold drops to £30,000; HMRC plans to extend the obligation to all qualifying taxpayers in later phases.

You can confirm the latest threshold on the official gov.uk MTD for Income Tax guidance. HMRC also publishes a register of all software that is recognised for MTD ITSA submissions.

What does MTD actually require?

Under MTD Income Tax you keep your books in HMRC-recognised software and submit:

• Quarterly updates — a summary of your income and expenses for each three-month period, sent to HMRC via the software’s API.
• A final declaration — an end-of-year statement that finalises your income, expenses, and reliefs for the tax year.

In other words: the spreadsheet-and-paper model of self assessment goes away for affected taxpayers. You must use HMRC-recognised software that talks to HMRC directly.

What features does the software need to have?

Every package on HMRC’s recognised-software list must, at minimum:

1. Allow you to record income and expenses digitally.
2. Keep an auditable digital record of those transactions.
3. Submit quarterly updates to HMRC via the MTD API on your behalf.
4. Submit the end-of-year final declaration via the MTD API.
5. Preserve digital records for the required retention period (typically six years).

What are the deadlines for quarterly updates?

HMRC sets four standard quarterly periods per tax year. The submission deadline is typically one month after each quarter-end. Your MTD software will remind you ahead of each deadline — so missing a quarter is rarely an excuse; pick one with a good notification system.

How do I pick the right software?

Start with our rankings. The four packages most UK sole traders choose between are FreeAgent, Xero, QuickBooks, and Sage. All four are HMRC-recognised for MTD Income Tax. See our FreeAgent vs Xero head-to-head if you’re torn between the two most popular options.

For most UK sole traders, our top pick is FreeAgent — opinionated, simple, and HMRC-recognised.

Can I get an exemption?

HMRC may grant an exemption if you cannot use digital tools for a specific reason (age, disability, location, or religious grounds). The exemption must be applied for and approved — it is not automatic. See gov.uk for the latest exemption criteria.

What about landlords specifically?

Landlords with UK property income are caught by MTD Income Tax on the same rollout schedule as sole traders. Most of the recognised software packages handle property income as well as self-employment income, but you should verify before signing up — not all packages support both cleanly.

Next steps

1. Decide whether you are affected (income > £50,000 from April 2026, > £30,000 from April 2027).
2. If yes, pick HMRC-recognised software — start with our rankings.
3. Import or set up your bookkeeping in your chosen package.
4. Submit your first quarterly update via the software’s MTD flow.
5. Submit the final declaration at year-end.