Making Tax Digital, explained without the jargon

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Who does it apply to?

It applies to sole traders and landlords, based on your gross income (that's your income before you take off any expenses) from self-employment and property added together. If your only income is a job or a pension, MTD isn't aimed at you.

When does it start for me?

It's phased in by income level, and HMRC looks at a specific past tax year to decide which wave you're in:

• April 2026 — if your combined self-employment and property income was over £50,000 in the 2024/25 tax year.
• April 2027 — if it was over £30,000 (based on your 2025/26 income).
• April 2028 — if it was over £20,000 (based on your 2026/27 income).

In other words, the test year steps forward with each wave — so mandation is decided by a return you filed well over a year earlier, not by what you're earning now. HMRC works this out from your submitted Self Assessment returns and writes to you about it.

What actually changes?

Two things. First, you keep your records digitally rather than in a shoebox or a notebook. Second, instead of one tax return a year, you send HMRC a short update every quarter — four times a year — plus a final declaration after the tax year ends that ties everything together.

The quarterly deadlines are the 7th of August, November, February and May. Your Self Assessment dates don't change: the final declaration and your tax payment are still due by 31 January.

Three things about those quarterly updates are widely misunderstood, and they're all reassuring:

• You don't pay tax quarterly. An update is information only — there's no payment attached. Your bill is still worked out once, at the year end.
• They're cumulative, not four separate quarters. Each update covers the year so far and supersedes the last one, so a mistake in your first quarter is simply corrected by the next update — no amendment needed.
• HMRC only gets category totals — not your individual invoices or receipts.

One catch: if you had no income or expenses in a quarter, you still have to send a nil update. Silence isn't an option.

What should I do now?

If you're already in the first wave, the job is to get current and stay current. If you're near or above the £30,000 threshold, your 2025/26 return — the one due by 31 January 2027 — is what decides whether MTD applies to you from April 2027. Either way, getting set up early means your next quarter isn't a scramble. You don't need to learn any software — that's what we're here for.