The Complete MTD Timeline For Sole Traders & Landlords

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If you’re a sole trader or landlord whose annual turnover was over £50,000 for the tax year 2024/2025, it’s time to get ready for Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) on April 6th. This marks the start of MTD for ITSA, but there are other key dates that you need to add to your tax calendars.

It can feel confusing as there’s a few different milestones to know about it, but don’t worry. For those who are about to join the new system, we’ve provided this clear schedule of what will be happening and when.

We’ll also be taking you through everything you need to do before April 6th this year, including how to sign up to MTD for ITSA, how to keep digital records, and why you’ll be making life much easier for yourself by signing up to one of the best accounting software platforms for small business owners.

💡Key takeaways

Sole traders and landlords with a qualifying income of over £50,000 must be ready to begin MTD for ITSA starting April 6, 2026.
You will need to start using HMRC-approved software to store digital records of all business income and expenses.
The mandatory income threshold will lower to £30,000 in April 2027 and £20,000 in 2028.
Submit four quarterly summaries of your tax position directly to HMRC via your software, followed by a final end-of-year declaration.
Follow the “digital links” rule by ensuring all data moves electronically between software without manual copying or pasting.
You need to report income sources separately if you receive earnings from both self-employment and property.

What is the current timeline for Making Tax Digital?

Making Tax Digital was originally introduced in 2019 for VAT-registered businesses, but as of April 6th this year it will now include sole traders and landlords whose qualifying income is over £50,000.

Making Tax Digital is a government scheme that was introduced in an attempt to modernise how business tax is recorded and paid in the UK. The intent is to move to a digitised system that relies on a more real-time approach, as opposed to one big end-of-year tax return.

This was partly so HMRC could close the “tax gap” (the amount that is owed to them vs. what is actually collected in the tax year), but it’s also beneficial for business owners: it gives you a clearer understanding of your financials and can help minimise errors.

At this stage, all VAT-registered businesses will have already been brought onto the Making Tax Digital system, but very soon, sole traders and landlords will be included:

This begins on April 6th 2026 with all sole traders and landlords with qualifying income over £50,000 (for the 2024 to 2025 tax year)
The threshold will drop to £30,000 (for the 2025 to 2026 tax year) in April 6th 2027
The threshold will drop again to £20,000 (2026 to 2027 tax year) in 2028

MTD: What do I need to do before April 6th?

There’s three main targets to hit before April 6th rolls around: signing up for MTD for ITSA with HMRC, setting yourself up with compliant software, and beginning to keep digital records.

1. Sign up for MTD for ITSA

This might sound like an obvious one, but it’s easily missed, as HMRC does not auto-enroll you in MTD for ITSA: you need to sign up via gov.uk. It’s different to MTD for VAT, as those businesses are automatically enrolled by HMRC.

You’ll need to login using your ID and password for Self Assessment. You may also be asked to confirm your identity, and during the sign up process you will be asked for:

Your business start date or the date you started receiving property income (within the last two tax years)
Confirmation of the tax year you will begin using MTD for ITSA
You business name (sole traders only)
Your business address (sole traders only)
The trade of your business (sole traders only)

Just don’t leave signing up until the last minute! Make sure you’ve allowed yourself plenty of time to sign up for MTD before the deadline.

2. Choose your software

One of the key aspects of MTD is that you need to be able to digitally store records and also submit updates directly using approved HMRC-approved software.

Now, there’s a couple of different options for using compliant software, and technically you don’t need full cloud accounting software to be MTD-ready, but our recommendation is to use the best accounting software for the self-employed.

You can choose to continue using older, outdated software, but in addition to this, you must have software that’s capable of storing digital records as well as submitting reports to HMRC. This means you’ll have to chain your different software options together using ‘bridging software’.

What is 'bridging software'?

‘Bridging software’ connects your old software (like a spreadsheet for example) to HMRC, making it MTD-compliant. However, while we understand it’s tempting to want to keep your old system, this really isn’t the best way of doing things. It’s fiddlier –and less comprehensive – than just using full accounting software.

Having an MTD-compliant, end-to-end, software solution like a cloud accounting software will make your life much easier. Everything can be done from one platform. You’ll also get access to tools and features that will make your bookkeeping much smoother, like receipt capture tools and AI-productivity assistants (depending on your plan).

You can find a comparison table of our top recommendations for MTD-ready accounting software below, including the big three (Xero, QuickBooks, and Sage):

		Rating	Price from	Free trial
FEATURED PROVIDER	BEST OVERALL
Xero	Zoho Books	FreeAgent	QuickBooks	Sage	Clear Books
4.3	4.8	4.5	4.5	4.2	4.0
~~£7/month (+ VAT)~~ Get 90% off for 6 months	Free	~~£10/month (+ VAT)~~ £5/month for 6 months (+ VAT)	~~£10/month~~ ~~(+ VAT)~~ Get 90% off QuickBooks for a year	~~£18/month (+ VAT)~~ 90% off the first three months	Free

Try Xero	Compare Deals	Compare Deals	Compare Deals	Try Sage	Compare Deals

3. Start keeping digital records

This is a central tenet of MTD: you need to record and store digital copies of all your income and expenses. You are required to keep digital records of:

Income (from self-employment): including your sales, takings, and any fees.
Expenses (from self-employment): such as travel costs, cost of stock, office costs, and financial costs.
Income from property: like rent, premiums for the grant of a lease, reverse premiums, and inducements.
Property expenses: including rent, repair costs, maintenance, and other services.

When adding these to your records, you will need to always include:

Amount
Date income was received (or the date when expenses were incurred)
Category (this depend on the type of business you run, and will be the same as the one’s used for Self Assessment)

What is the 'digital links' rule?

This is a rule set forth by HMRC, stating that once information has been entered into your MTD-compliant software, it must not be moved again manually. That means it can’t be copied and pasted, cut and pasted, or manually re-typed from one software to another. Everything must move electronically.

This is a crucial rule for MTD, so it’s important to understand. There has to be digital audit trail that HMRC can follow, to understand how the data moved.

HMRC accepts the following as digital links:

Linked cells in a spreadsheet
Using a flash drive or memory stick, which is then handed to another person to upload to HMRC-approved software
XML, CSV import and export, and downloading or uploading files
APL transfer

Now that you know what you need to do before the April 6th deadline, let’s take a closer look at the MTD timeline. These are the milestones you need to be ready for in the tax year, and will be just as crucial to learn as the accounting reference date.

MTD milestones in the first year

For your first year as part of MTD for ITSA, there will be four quarterly updates to hit, and then your end-of-year assessment. You can use our handy infographic below to quickly check the key milestones.

Now let’s break down exactly when the key dates will be happening, and what you need to do:

April 6th 2026: MTD begins

This is the start of MTD for all sole traders and landlords over the £50,000 threshold: by this time you should be signed up to the scheme, and be keeping digital records using HMRC-approved software.

August 7th 2026: send the first quarterly update

This will be the deadline for sending your first quarterly update, covering April 6 2026 to July 5 2026. Ideally, most of the work will be done through compliant software (another reason why it’s better to use full cloud accounting software as opposed to trying to patch together spreadsheets with bridging software).

Remember to include the required details of all your income and expenses.

One thing to note: there was some concern amongst taxpayers when this scheme was introduced that each quarterly update would be equivalent to a Self Assessment tax return. Thankfully, this is definitely not the case. These are merely summaries of your tax position, and will be relatively simple to submit.

November 7th 2026: second quarterly update

Each update will be three months apart, so November 7th will be the deadline for the second quarterly update. Because the updates are cumulative, this second one will cover April 6 2026 to October 5 2026.

By the second update, you should have a firmer idea of what’s involved in the process. You might start to see the benefits as well, like have a real-time look at your finances, and predicted summary of your tax bill (preventing some nasty surprises in January).

31st January 2027: Self Assessment for 2025 to 2026 tax year

This is a deadline that should already be in your calendar, even without getting to grips with MTD. This will be the standard deadline for filing your Self Assessment tax return.

7th February 2027: send the third quarterly update

Time for number three out of four of your quarterly updates for the tax year: covering April 6 2026 to January 5 2027. By now you should be getting into the swing of MTD for Income Tax, and seeing some of the other benefits emerge: by keeping a digital record of all your transactions there won’t be anymore scrabbling around for lost scraps of paper.

7th May 2027 : send fourth quarterly update

The fourth and final quarterly update for the tax year is due on the 7th May 2027, covering April 6 2026 to April 5 2027. At this point, you’ll have successfully submitted all your updates for the tax year.

31st January 2028: submit your 2026/27 tax return via your MTD software

While the standard year-end Self Assessment is being scrapped, you still need to submit your tax return. But as you’ve been submitting your quarterly updates throughout the year, the bulk of the work is already done.

At this stage, all that’s left to do is finalise your position, and make any last adjustments if something doesn’t add up. You’ll also need to include any other taxable income you might have received like:

Interest
Dividends
Capital gains tax

After this, all that’s left to do is pay your tax bill, and that’s your MTD obligations for the year sorted!

Limited companies, and partnerships

Limited companies are not required to use MTD for ITSA, however, if you’re registered for VAT you will need to use MTD for VAT.

As for Partnerships, HMRC has confirmed that at some point in the future they will be moved on to MTD for ITSA. There’s no set deadline for this though, and for now they will carry on using standard Self Assessment.

Start dates for the next wave of MTD

HMRC plans to lower the threshold for MTD for ITSA with each passing year. So far, the plan for the next waves of MTD will be:

April 6 2027: £30,000

If you’re a sole trader or landlord whose turnover exceeds £30,000, you will be due to start MTD for ITSA from April 6 2027.

April 6 2028: £20,000

The threshold will then be lowered again in 2028, so any sole traders or landlords with a qualifying income over £20,000 will then start MTD for ITSA in April of that year.

If this applies to you, you’ll follow the exact same reporting timeline we’ve detailed above, just pushed back to your subsequent start year.

What if I’m a sole trader with a very small turnover, will MTD still apply to me?

As of yet, HMRC has announced no further plans to lower the threshold under £20,000 for MTD for ITSA. So those who only have a tiny turnover (£15k from your side hustle, let’s say), won’t have to worry about MTD for ITSA just yet.

However, HMRC does remain committed to digitising tax in the UK, so it’s not out of the question that the threshold will be lowered again. It’s understandable that small turnover businesses might be worried about this, but once they adapt to the new system they may find it beneficial.

Is there a timeline for MTD for partnerships?

As of yet, HMRC has confirmed no plans for introducing MTD for partnerships. However, do keep in mind that if your business’s turnover is above the £90,000 VAT threshold, you will automatically be enrolled in MTD for VAT.

Is there still a plan to introduce MTD for Corporation Tax?

No. In 2025, the government announced they were scrapping plans for MTD for Corporation Tax. However, considering HMRC’s commitment to digitising tax in the UK, there is still the possibility that the way corporation tax is paid in the UK may be revised.

What happens if I miss the MTD deadlines?

HMRC has introduced a new penalty system for Making Tax Digital for Income Tax, but the good news is, it’s taking a softer approach in the first year.

The system works likes this: if you submit a filing after the deadline, you’ll accrue a penalty point. For those who are submitting quarterly updates (this will cover the vast majority of MTD for ITSA users), then the threshold you need to hit to actually get a fine is four points.

This means that if you miss four deadlines, you’re going to get hit with a £200 fine. It’s similar to how you get points on a driving license.

Easement for the first year

HMRC has shown some leeway for the initial users of MTD for ITSA – those joining the scheme in April 2026 – and you won’t get penalty points for a late quarterly submission in the first year.

In addition to this, the standard 15 day window for late payment penalties has been extended to 30 days.

Just keep in mind: you still need to submit all four quarterly updates in order to submit your end of year tax return. So make sure you keep on top of your quarterly updates. It also doesn’t apply to your end of year tax return for 2026/2027.

The easement on penalties is designed to take the pressure off business owners, but you should still aim to be submitting before the deadline. However, this softer approach doesn’t apply to your end-of-year declaration, or to late payments of your actual tax bill. So don’t get caught out by this.

Our top tips for successful MTD timeline

These are the Startups top tips for a smooth MTD transition:

Get set up in plenty of time

If you’re making the transition from standard spreadsheets to full cloud accounting software, make sure you’ve left yourself a healthy amount of runway. These platforms are intuitive, but they’re still complex tools in many ways.

Ensure you’ve left enough time to get to grips with your software before you need to start sending updates.

Choose a software that suits your needs

One of the best things you can do to be prepared for the HMRC deadlines is to get yourself set up with the best accounting software. Any of the industry big three – Xero, Sage, and QuickBooks – would make a good choice.

Having a bookkeeping software that can fully handle your needs, and offer helpful tools like bank reconciliation and receipt capture, will make your life much easier.

Can I continue using spreadsheets?

Well, the answer is yes and no: just spreadsheets on their own are no longer viable. HMRC requires you to have software that can keep digital records and you’ll also need to be able to submit updates directly to them. Spreadsheets can’t submit updates directly to HMRC, so if you’re determined to keep using them, you’ll need to use ‘bridging software’.

However, we’d advise that ‘bridging software’ isn’t an ideal solution. While it can be a simple solution, manual entry can leave more space for error. Plus, there’s no guarantee HMRC won’t amend the rules further down the line. So the time spent learning how to use full accounting software will be well worth your while.

Work with an accountant

If you’re feeling confused about any stage of the MTD process, or have some niche tax questions relating to your situation, it’s always worth seeking out an accountant to get professional advice. Remember, accounting software is just a tool – an actual accounting professional provides the expertise.

Major mistakes to avoid

From using non-HMRC compliant software to misunderstanding the digital links rule, there’s a few points that can trip you up with MTD. Here are some of the biggest errors to avoid before tax time:

Relying on free software

It’s completely understandable that you’d want to keep your overheads as lean as possible, but just bear in mind that free software can have some frustrating limitations. For example, free software options often have a cap on invoices, which is typically quite restrictive.

You’ll also be missing out on the helpful features included with paid-for plans, like document capture technology. AI-powered tools that can create more efficient workflows are also usually reserved for paid plans, too.

When thinking about free accounting software plans, just weigh up the money saved against the potential headaches you could resolve by choosing a premium plan.

Using the wrong software

We’ve said it before, but it’s well worth saying again: you need to make sure your chosen software is HMRC-approved. If you get to the April deadline only to find out your accounting software isn’t MTD-ready, this could land you in some hot water.

To avoid potential fines, and the mad scramble to get set up on approved-software, you should ensure you’ve used the HMRC software tool to triple-check your software is MTD-approved.

You need to report income separately

This doesn’t apply to everyone, but it’s a technical point that can be easily missed: you need to report all your income sources separately. This means that if you’re receiving income from a property you own, but you also have a side-hustle, you can’t submit your total income in one report.

You need to submit separate quarterly reports, one for your property income, and one for your sole trader income. The same also applied if you run multiple businesses. These will all need to be submitted as separate reports to HMRC.

You don’t have a business bank account

If all your business transactions are going into your personal bank account, this will be nightmare when it comes to reporting your tax. This is because bank feed tools in your accounting software automatically pull through your bank transactions to your platform.

This saves you a huge amount of admin, unless it’s also pulling through personal transactions. Then you’ll need to go in and untangle it all. So make sure you have a dedicated business bank account to make life easier.

Can I get an exemption from Making Tax Digital?

While exemptions are granted by HMRC, these are usually under highly specific circumstances relating to age, disability, or religious beliefs preventing you from accessing the necessary technology.

HMRC might also consider an exemption based on geographic location, if, for example, where you’re based makes it too difficult for you to access the correct software. Just bear in mind, they don’t offer exemptions based on reasons like:

You prefer the old system and want to keep using it
You find accounting software too complicated to use

All requests are judged on a case-by-case basis, and you can apply for exemption through HMRC directly. Just be certain you meet suitable requirements, because if you don’t, you’ll need to start getting ready now.

Summary: what do to do before the deadline

In order to be ready to meet the current MTD for ITSA deadlines, you need to be set up with HMRC-approved software, be keeping digital records, and are ready to directly submit your four quarterly updates throughout the tax year.

Just so long as you have the key dates marked in your calendar, you can’t go too far wrong:

April 6th 2026: MTD for ITSA start date for sole traders and landlords with qualifying income over £50,000
April 6th 2027: the threshold drops to qualifying income over £30,000
April 2028: the threshold drops to qualifying income over £20,000

Just remember, the new, real-time system is designed to make things easier for business owners, not harder. If you are feeling stressed still, don’t worry, just use the Startups 90-day MTD readiness checklist, to get yourself prepared for the big deadline.

Making Tax Digital deadlines: the full timeline for sole traders and landlords

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What is the current timeline for Making Tax Digital?