Making Tax Digital for Income Tax: common questions
Short, sourced answers to the Making Tax Digital for Income Tax questions people ask most: who has to use it, when updates are due, what software is free, how to sign up, and what happens if you are late. Each answer links to the full guide or the tool that works it out for you.
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Who has to use MTD for Income Tax?
You must use it if you are registered for Self Assessment and your combined gross self-employment and property income, before expenses, is over the threshold for your wave: over £50,000 from 6 April 2026, over £30,000 from April 2027, and over £20,000 from April 2028.
What income counts towards the threshold?
Your gross income before expenses, added together across every self-employment and property source you have. It excludes PAYE wages, dividends, savings interest, capital gains and, for now, income from a partnership.
When do I have to send MTD updates?
Quarterly updates are due on the same four dates every year: 7 August, 7 November, 7 February and 7 May, with a separate update for each self-employment and property source. For the April 2026 wave, the first update is due 7 August 2026. Your Final Declaration follows on 31 January after the tax year ends.
Do landlords have to use MTD for Income Tax?
Yes. It applies to a property business (HMRC's term for letting property) on the same income test as sole traders. If you are also self-employed, your rental and self-employment income are added together and tested as one figure.
Is there genuinely free MTD software?
Yes, and we surface free routes before paid ones. FreeAgent is free while you hold a NatWest, RBS or Ulster Bank business account, or use a Mettle account at least once a month. Starling's Accounting Essentials is free for its business account holders. Sage's Sole Trader Free tier is free for non-VAT sole traders. Each route has a real condition, and none is a time-limited trial.
The genuinely free software options Compare software for your situation
Can I keep using spreadsheets?
Yes, as long as the spreadsheet is digitally linked to HMRC through bridging software. A spreadsheet on its own, with the totals typed into HMRC by hand, does not meet the digital records requirement.
How do I sign up for MTD for Income Tax?
You sign up through HMRC's online service using the same Government Gateway user ID you use for Self Assessment. Get compatible software first, then sign up. You must already be registered for Self Assessment and have filed a return in the last two years.
What happens if I miss a quarterly deadline?
For the 2026/27 tax year only, the April 2026 wave gets no penalty point for a late quarterly update. That easement does not cover your Final Declaration or paying late, and it does not apply in any later year. You still have to file the update.
Do I still file a Self Assessment return?
Yes. You still file a normal Self Assessment return for the tax year before you join MTD. For the April 2026 wave that is the 2025/26 return, due by 31 January 2027, and it is separate from your new quarterly updates and your first Final Declaration.
Does MTD change when I pay my tax?
No. Your payment dates do not change. Payments on account and balancing payments stay due on 31 January and 31 July, and a quarterly update creates no payment on its own.
How is TaxQuarters different from HMRC's own MTD tools?
HMRC's tools set out the rules and list recognised software, and they do it well. What they do not do is compare prices, work out the cheapest compliant route for your situation, give you a deadline calendar you can keep, or send you reminders. HMRC also does not recommend any software product, so its software finder shows you every option without saying which fits you. TaxQuarters is the independent layer on top: free tools that give you an answer you can keep, price comparisons that show free routes first, and reminder emails before each deadline. Every fact on this site links to its official source and shows the date we last checked it. We are independent and not affiliated with HMRC. For the rules themselves, GOV.UK is always the right place to check; for what to do about them, that is what this site is for.
Browse every guide
Every MTD for Income Tax guide on the site, grouped by topic. These go deeper than the answers above.
Getting started
- Am I in MTD wave 1? Check whether Wave 1 applies to you
- MTD waves 1, 2 and 3 explained The rules most people miss, in one place
- What counts as qualifying income for MTD? Your gross income before expenses, combined across every source
- Started a new business? When MTD applies to you New businesses get extra time. Here is how it works
- How to sign up for MTD for Income Tax The individual sign-up route, step by step
Software
- The genuinely free MTD software options Real free routes, and who qualifies for each
- How FreeAgent is free with NatWest, RBS, Ulster Bank or Mettle What the free route actually requires
- MTD software for sole traders, landlords or both What fits your situation
- Are spreadsheets still allowed under Making Tax Digital? Yes, if they connect to HMRC through bridging software
- What is bridging software and do you need it? The digital link that keeps a spreadsheet compliant
- Digital links: what HMRC actually requires Fix figures in the sheet and re-link, never retype
- Bridging software for MTD, compared The main HMRC-recognised options for spreadsheet users
Deadlines and penalties
- No MTD software yet and the deadline is close? Free software exists, and several can be set up in a day
- What to submit for your first MTD deadline What actually goes into your first quarterly update
- What happens if you miss an MTD deadline What is and is not covered if you are late
- Your MTD deadline calendar, in one place Every MTD deadline for your first year, in one place
- Your checklist before the MTD deadline Six things to confirm before you file
- Do you still need to file a Self Assessment return? Yes, alongside your new MTD obligations
- What the MTD soft landing protects you from What it covers, and what it does not
- Does a late MTD update still count if you catch up? What catching up does and does not undo
Landlords
- Do landlords need Making Tax Digital? Yes, on the same income test as sole traders
- Self-employed and a landlord? How MTD combines your income Your income sources are tested together, not apart