Making Tax Digital for Income Tax
What is MTD?
HMRC now requires sole traders and landlords to keep their tax records in software and report to HMRC from that software: a short update every three months, then a final declaration after the tax year ends.
Free during pilot · No credit card required · Not tax filing software
What changes
Before
One Self Assessment tax return a year, filed after the tax year ends.
Now
Records kept in compatible software all year. A summary sent to HMRC every three months. A final declaration after the year ends, which takes the place of the Self Assessment return.
A quarterly update is a summary: totals for each income and expense category, not individual receipts or invoices.
Who has to do it, and when
MTD for Income Tax applies to sole traders and landlords who are registered for Self Assessment. When a person joins depends on their qualifying income: gross income from self-employment and property, before expenses and allowances.
| Starts | Qualifying income over |
|---|---|
| 6 April 2026 | £50,000 |
| 6 April 2027 | £30,000 |
| 6 April 2028 | £20,000 |
HMRC looks at qualifying income from two tax years earlier. For the April 2026 start, that is the 2024 to 2025 tax year.
Limited companies and partnerships are not in scope for now.
The calendar for 2026 to 2027
Standard quarters, for the tax year 6 April 2026 to 5 April 2027:
- Quarter 1, to 5 July7 August 2026
- Quarter 2, to 5 October7 November 2026
- Quarter 3, to 5 January7 February 2027
- Quarter 4, to 5 April7 May 2027
- Final declaration31 January 2028
Software can also use calendar quarters (to 30 June, 30 September, 31 December and 31 March). The deadlines are the same.
Late quarterly updates do not earn penalty points in the first year of MTD for Income Tax. After that, each missed quarterly deadline earns a point, and four points bring a £200 penalty.
What it means for an accountant
- Each client now owes you records four times a year, not once.
- Records and documents arrive late, incomplete or in the wrong format, and the follow-up is manual.
- You need one place to see who has sent what, what is missing and who is late.
That last part is what PracticeNudge does.
What PracticeNudge does, and does not do
PracticeNudge does not prepare returns and does not send anything to HMRC. Your accounting software (Xero, QuickBooks or FreeAgent) does that. PracticeNudge works next to it: it asks clients for records and documents, reminds them, and shows you who is ready and who is late.
Check the current rules
Dates and thresholds are HMRC's rules and can change. Confirm them on gov.uk before you advise a client.
Collect your clients' MTD records on time
Free during pilot · No credit card required · Not tax filing software