MTD Income Tax April 2026: who had to start and what remains due

MTD Income Tax April 2026 marked the start of mandatory digital reporting for some UK sole traders and landlords, rather than a new tax-payment date. HM Revenue & Customs says people within the first group must keep digital records and send quarterly updates, while the annual tax return and payment deadline remains 31 January after the end of the tax year.

The available information cannot determine whether an individual filed a quarterly update on time, nor does it establish a single deadline for every reader. It also does not support estimates of how many people may have missed an initial update.

Who had to use MTD for Income Tax from April 2026?

HMRC says the rules applied from 6 April 2026 to people who are registered for Self Assessment, receive self-employment income, property income, or both, and had qualifying income above £50,000 in the 2024/25 tax year.

Qualifying income is the combined income from self-employment and property before expenses, based on the previous tax year’s submitted Self Assessment return, according to HMRC. It can include more than one trading or property-income source. Employment income, dividends, state and private pensions, and an individual partner’s share of partnership profit are excluded from that calculation.

The £50,000 test can therefore capture a person with both rental and trading receipts even if neither source alone exceeds the threshold. HMRC’s example shows that £25,000 of rental income and £27,000 of self-employment income produce qualifying income of £52,000.

What does the new reporting process require?

Making Tax Digital for Income Tax changes the method and timing of reporting, not the date on which the annual tax bill is ordinarily due. HMRC says affected taxpayers, or their agents, need software that works with the service to create, store and correct digital records, send quarterly updates, and submit the year-end tax return.

Quarterly updates report income and expenses during the year. The final return completes the taxpayer’s annual position, including other income and gains where relevant. HMRC says tax due under the annual process must still be paid by 31 January following the tax year.

HMRC does not provide the software itself. Taxpayers need to choose and authorise suitable software, or arrange for an agent to act for them. A person who has not received an HMRC letter still has responsibility to check whether the rules apply, the department says.

Will a late quarterly update trigger a penalty?

HMRC says it will not issue penalty points for late quarterly updates during 2026/27 to taxpayers who were required to enter the system on 6 April 2026. That limited first-year treatment does not remove penalties for a late annual tax return or for tax paid after its due date.

The scope will widen. HMRC says those with qualifying income above £30,000 in 2025/26 must begin on 6 April 2027, while the threshold falls to more than £20,000 for those assessed on 2026/27 income, starting from 6 April 2028. People who may be digitally excluded can be exempt, but must continue to report through Self Assessment if exempt.

HMRC directs taxpayers to its eligibility tool to check their position and says those in scope can sign up now or ask an agent to do so.

This story draws on original reporting from Finextra Research.