- MTD for Income Tax begins 6 April 2026 for sole traders and landlords with qualifying income over £50,000.
- You will keep digital records and send four quarterly updates to HMRC instead of one annual return.
- There are no late-submission penalty points for quarterly updates in the first year, 2026/27, but you must still file.
Making Tax Digital for Income Tax has been mandatory since 6 April 2026 for freelancers whose qualifying income is over £50,000. If that is you, you must now keep digital records and send HMRC four quarterly updates a year instead of one annual Self Assessment return. The first quarterly update for 2026/27 is due by 7 August 2026.
The system is already live, so this is about acting now rather than preparing for a future date. The steps are clear and manageable, even if you have not started yet. If you haven’t already, we’d highly recommend seeking out expert Accounting Services to help you with the transition.
Who is in scope for Making Tax Digital for Income Tax?
You are in scope from 6 April 2026 if your qualifying income for the 2024 to 2025 tax year was over £50,000. Qualifying income is your total gross income from self-employment and property, before any expenses.
This is the point most freelancers get wrong. HMRC looks at turnover, not profit. If you billed £55,000 but took home £35,000 after costs, you are still in scope.
It also combines your income streams. A freelance designer earning £45,000 who also collects £6,000 in rent has £51,000 of qualifying income and is mandated, even though neither source crosses £50,000 alone.
Income that does not count toward the test:
- Salary or wages taxed through PAYE
- Dividends from shares
- Interest on savings
HMRC writes to people it believes are affected, but the legal duty to check your own position is yours.
What changes for freelancers under Making Tax Digital?
The annual Self Assessment return is replaced by quarterly digital updates plus a year-end final declaration. You report income and expenses to HMRC four times a year using compatible software.
The quarterly deadlines for the 2026 to 2027 tax year are fixed:
Quarter | Period covered | Submission deadline |
Q1 | 6 April to 5 July 2026 | 7 August 2026 |
Q2 | 6 April to 5 October 2026 | 7 November 2026 |
Q3 | 6 April to 5 January 2027 | 7 February 2027 |
Q4 | 6 April to 5 April 2027 | 7 May 2027 |
Each update is cumulative, so it covers the year so far rather than just that quarter. You send a separate set of updates for each income source, so a sole trader who also lets a property reports two streams.
Your final declaration replaces the old tax return and is still due by 31 January, but the software already holds your quarterly figures. Quarterly updates are information reports, not tax payments, so your tax is still calculated at year-end and paid on the usual January timetable.
Which software do you need for Making Tax Digital?
You need software recognised by HMRC as compatible with MTD for Income Tax. Paper records and standalone spreadsheets no longer meet the requirement on their own.
Compatible tools connect directly to HMRC and submit your quarterly updates for you. Options range from free software for simple cases to full accounting platforms like Xero, which many freelancers already use for invoicing and bookkeeping.
Quick tip: if you already use accounting software, check today whether it is on HMRC’s MTD for Income Tax compatible list. Some VAT-ready tools are not yet enabled for income tax.
Sleek pairs MTD-compatible software with a real accountant who files for you, so the quarterly rhythm runs in the background. If you want the wider picture first, see our guide to MTD for small business.
How do you get ready for Making Tax Digital for Income Tax?
Getting set up runs through checking your income, choosing software, setting up a Government Gateway account, and signing up through HMRC’s online service, as registration is not automatic. We have built the full sequence into our MTD readiness checklist, which walks you through each step in order.
If you have not yet filed your latest return, our guide to filing a Self Assessment tax return covers the 2025/26 figures you still owe under the old system before MTD takes over.
What happens if you miss a Making Tax Digital deadline?
For the first year, 2026/27, HMRC will not charge penalty points for late quarterly updates. This is a deliberate soft landing to let people adjust, but you must still keep digital records and submit. If you missed the 7 August update, file it as soon as you can.
From 6 April 2027 the full points system applies. You collect one point for each missed deadline, and at four points you are charged £200, plus a further £200 for every later missed submission. Points expire after 24 months if you stay below the threshold.
The year-end final declaration is not covered by the soft landing. Miss it and standard late filing consequences apply, so treat 31 January 2028 as a hard date even in year one.
When does Making Tax Digital apply below £50,000?
If your qualifying income is below £50,000, you are not yet mandated. MTD for Income Tax is being phased in, so lower earners join in later years rather than now.
The phased thresholds are set out below.
Start date | Qualifying income over | Based on tax year |
6 April 2026 | £50,000 | 2024 to 2025 |
6 April 2027 | £30,000 | 2025 to 2026 |
6 April 2028 | £20,000 | 2026 to 2027 |
Those with qualifying income of £20,000 or less currently have no confirmed date. If you are close to a threshold, it is worth moving to digital records early so the change is smooth when it reaches you. For background on how your income is taxed in the meantime, see our explainer on freelance tax.
How Sleek helps with Making Tax Digital for Income Tax
Sleek gives freelancers MTD-compatible software and a dedicated accountant who handles the quarterly updates and final declaration for you. You stay compliant without learning a new filing system or watching four deadlines a year.
That means you can cross the £50,000 threshold without the admin landing on your desk.
Disclaimer: The preceding information is not legal advice. This content is aimed to provide general guidance. For more formal or legal advice, contact Sleek directly.
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FAQs on Making Tax Digital for Income Tax
Do all freelancers have to use Making Tax Digital now?
No. Only sole traders and landlords with qualifying income over £50,000 for the 2024 to 2025 tax year have been mandated since 6 April 2026. Qualifying income is gross turnover plus gross rental income, before expenses. Freelancers below £50,000 join later, with the threshold dropping to £30,000 in April 2027 and £20,000 in April 2028.
How often do I report to HMRC under MTD for Income Tax?
Four times a year, plus once at year-end. You send a quarterly update of income and expenses through compatible software, with deadlines on 7 August, 7 November, 7 February and 7 May for the 2026/27 tax year. A final declaration then replaces your old Self Assessment return and remains due by 31 January.
Is MTD qualifying income based on profit or turnover?
Turnover. HMRC tests your total gross income from self-employment and property before any expenses are deducted. This catches freelancers who assume a modest profit keeps them exempt. If your combined gross income from these sources tops £50,000, you are in scope even if your taxable profit is far lower.
Do I need to register for MTD, or will HMRC do it automatically?
You must register yourself. HMRC says it will write to people it believes are affected, but signing up is not automatic. You register through HMRC’s online service using a Government Gateway account. If you do not receive a letter, the responsibility to check your position and register still rests with you.
Will I be fined if I miss a quarterly update in 2026/27?
No. For the 2026/27 tax year there is a soft landing, so HMRC will not issue penalty points for late quarterly updates. You must still submit them and keep digital records. From 6 April 2027 the points system applies, with a £200 penalty once you reach four points for missed deadlines.
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Can I still use spreadsheets under Making Tax Digital?
Only with bridging software. MTD for Income Tax requires digital records held in compatible software that connects to HMRC. A standalone spreadsheet does not meet the rule on its own, but bridging tools can link a spreadsheet to HMRC. Most freelancers find a full accounting platform simpler than maintaining a spreadsheet plus a bridge.
What software counts as MTD-compatible for income tax?
Software recognised by HMRC for MTD for Income Tax. This ranges from free tools that generate a basic submission to full platforms such as Xero and QuickBooks. Check HMRC’s compatible software list before committing, as some products that handle MTD for VAT are not yet enabled for income tax reporting.
