Introduction
About Making Tax Digital for Income Tax and what to expect after you sign up.
Making Tax Digital for Income Tax is a new way of reporting income and expenses if you’re a sole trader or landlord.
Under the new way of reporting, sole traders and landlords will use compatible software that enables them to:
- create and store digital records of their business income and expenses
- send quarterly updates to HMRC
- submit a tax return and pay tax due by 31 January the following year
The new way of reporting will become mandatory in phases, starting from 6 April 2026. Sole traders and landlords who earn income from self-employment or property will have to sign up, unless:
- their qualifying income is £30,000 or less (before expenses or taxes are deducted)
- they’re exempt from Making Tax Digital for Income Tax
Those with a qualifying income of:
- more than £50,000 need to start using Making Tax Digital for Income Tax from 6 April 2026
- more than £30,000 need to start using Making Tax Digital for Income Tax from 6 April 2027
You can voluntarily sign up to help test and develop the service if you’re eligible. If you earn below the qualifying income, you can still take part in the testing of our service.
Throughout the tax year 2024 to 2025, we are working with a wide range of businesses, agents, and software developers. This is to help us test and develop the new way of reporting income and expenses.
In the tax year 2024 to 2025, we will test the new service with a limited number of volunteers.
This will allow:
- all volunteers (including agents and their clients) to test and develop the service, including its support and guidance
- software developers to test their products alongside HMRC’s service, and identify and resolve issues
We’re building and continuing to improve the service to enable more users to join the service and ensure it meets their needs. Your feedback and support in helping us test the new service is important.
October to December 2024
We will:
- check if you’re able to make your quarterly update
- make sure you can view your payment on account for the current year — in your software or HMRC online services
- check your payment on account balance gets updated
January to March 2025
We will check:
- if you’re able to make your quarterly update
- you can submit your tax return and pay tax due by 31 January 2025
- charges to your payment on account balance and that you can adjust your payment on account
- we can manually adjust financial information in your record and that this transfers to your account
6 April 2025 to 5 April 2026
From 6 April 2025, more sole traders and landlords can volunteer to use Making Tax Digital for Income Tax. This will enable them to get familiar with using software and keeping digital records, before it becomes mandatory from April 2026.
We will have tested the service with a significant number of users, including gathering feedback on any new features as and when added.
We will continue to work with agents, landlords and sole traders to ensure they are prepared and are supported before and after they sign up.
During the testing phase, HMRC will not issue any late submission penalties for quarterly updates. This means if you sign up after the tax year starts, you only need to create all your digital records and send your updates before you submit your tax return. The deadline for this is 31 January following the end of the tax year.
You can either:
- catch up with your digital record-keeping and quarterly updates when you sign up for Making Tax Digital for Income Tax
- start keeping digital records from the date you sign up and update your earlier records later
For example, you may choose to catch up later if you do not normally do your record-keeping until the end of the tax year.
If you choose to catch up later
You can send nil returns for the update periods that ended before you signed up. Once you’ve created all your digital records, you’ll need to resend your updates for those earlier update periods.
If you would like to sign up voluntarily for Making Tax Digital for Income Tax, read Before you sign up. If you’ve already signed up, you can also check you have completed all steps required to carry on using the service.