by Asim Abbas
11 November 2026 
Making Tax Digital or Self Assessment: which applies to you?
Making Tax Digital or Self Assessment: which applies to you?
Since 6 April 2026, some sole traders and landlords have had to keep digital records and send updates to HMRC every quarter. Others still file a normal Self Assessment return once a year.
- MTD for Income Tax applies to sole traders and landlords, not limited companies
- It started on 6 April 2026 for qualifying income over £50,000
- The threshold falls to £30,000 in April 2027 and £20,000 in April 2028
- Everyone else keeps filing a normal Self Assessment return
Which group you’re in depends on your income from self-employment and property, and the threshold is falling each year.
This guide helps you work out where you stand now, when that might change and what to do about it.
What is Making Tax Digital for Income Tax?
Making Tax Digital (MTD) for Income Tax changes how you report your income. Instead of one return a year, you keep digital records in HMRC-recognised software and send a summary of income and expenses every quarter. At the end of the year you confirm your figures and submit your return through the same software.
Who has to use it?
It depends on your qualifying income: your total gross income from self-employment and property, before expenses. Salary, pensions, dividends and savings don’t count.
You earn a £40,000 salary and £22,000 from a rental property. Your qualifying income is £22,000, because salary doesn’t count. You’re not in MTD in April 2026 or April 2027, but you will be from April 2028 unless your rent falls.
Self Assessment tax calculator
See your tax on self-employed and rental income.
Who still files a normal Self Assessment return?
- Sole traders and landlords below the current threshold
- Employees and pensioners who file only because of other income, such as dividends or the Child Benefit charge
- Company directors filing for salary and dividends
- Partnerships, which aren’t in MTD for Income Tax yet
Limited companies don’t use MTD for Income Tax. If they’re VAT registered, they already use MTD for VAT.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179Can you be exempt?
Yes, in some cases. You can apply for an exemption if it isn’t reasonably practical for you to use software, for example because of age, disability, remoteness or religious beliefs. HMRC decides each case. See GOV.UK for the rules.
What if you miss a quarterly update?
MTD uses penalty points. Each late quarterly update earns a point, and when you reach four points you pay a £200 penalty. If you joined in April 2026, HMRC isn’t applying points for late quarterly updates in your first year. Later joiners don’t get that easement.
How to prepare
Check your 2025/26 return: if your qualifying income is over £30,000, you’ll be in MTD from 6 April 2027. Choose software now, move your records into it and practise a quarter. Our Making Tax Digital service sets everything up and sends your updates from £25 a month.
What should I do next?
Gross self-employment and property income only.
£50,000 now, £30,000 from April 2027, £20,000 from April 2028.
Spreadsheets need bridging software; most apps are simpler.
Our MTD service handles sign-up and every quarterly update.
Frequently Asked Questions
Does my salary count towards the MTD threshold?
No. Only gross income from self-employment and property counts. Salary, pensions, dividends and interest are left out.
Is the threshold based on profit or turnover?
Turnover. It’s your gross income before expenses, so a business with £35,000 sales and £20,000 costs is still over £30,000.
Do I still file a tax return under MTD?
Yes. After your four quarterly updates, you submit your final return through your MTD software by 31 January.
Do joint landlords count the full rent?
No. You count your own share of the rental income.
Can you send my quarterly updates?
Yes. As an HMRC registered agent, we send them for you. MTD Essentials starts from £25 a month including VAT.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Asim Abbas
I’m Asim Abbas, founder of Wingate Accountants and a Chartered Certified Accountant. I help sole traders, landlords and directors stay on top of their tax with fixed fees and plain-English advice.
