Making Tax Digital for Income Tax starts 6 April 2026. That's 7 days away.
If you earn over £50,000 as a sole trader or landlord, you're in scope for Phase 1. If you haven't set anything up yet — this is your checklist.
The actual minimum requirements
Compatible software — you need HMRC-recognised software that can submit quarterly updates digitally. FreeAgent, QuickBooks, Xero, Sage — or even some bridging software. You cannot use spreadsheets alone (unless they have a compliant bridging tool).
Authorise the software — log into your HMRC account and connect your software. This takes about 10 minutes if you have your UTR and Government Gateway credentials handy.
Set up your income records — categorise your income streams. For most sole traders, this is just "self-employment income." Landlords need a separate property income category.
First quarterly update — you'll need to submit by 5 August 2026 (covering April–June). You don't need to do anything on 6 April itself, but your record-keeping must be digital from that date.
What happens if you miss it
HMRC is using a penalty points system for MTD. Late quarterly submissions = 1 point each. Hit 4 points = £200 fine, then £200 for every subsequent late submission.
For 2026/27 (the first year), HMRC has indicated a soft-landing period — but don't bank on it. The system goes live and starts counting.
Common questions
"My income is just below £50,000 — do I need to bother?"
Not yet. Phase 2 (£30,000+) starts April 2027. But it's worth setting up the habit now.
"I already use an accountant — is this their problem?"
Partly. Your accountant can submit on your behalf using agent software, but you are responsible for keeping digital records. Your receipts, invoices, expenses — these need to live somewhere digital.
"Can I just use a spreadsheet?"
Only with HMRC-approved bridging software. A plain Excel file won't cut it.
"What about CIS subcontractors?"
CIS income counts towards your qualifying income threshold. If your gross earnings (before CIS deductions) plus any other self-employment income exceeds £50,000, you're in scope.
The free thing you can do right now
Landolio has a free MTD readiness checker — takes about 90 seconds to run through. It tells you whether you're in scope, what you need to do, and in what order.
If you want the full step-by-step guide with templates for your quarterly records, there's also an MTD Readiness Toolkit for £14 — covers software setup, record categories, quarterly submission walkthrough, and what to do if you're late.
7 days is enough time. It's not complicated — it's just new. The worst outcome is doing nothing and discovering in August that you've already racked up penalty points.
Get the free checker done today.
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