From April 2026, sole traders and landlords with a turnover (the amount charged to clients or tenants) of above £50,000 per year must use Making Tax Digital for Income Tax Returns rather than a Self-Assessment Tax Return to make submissions to HMRC.  These Making Tax Digital returns must be submitted quarterly instead of annually.  The default quarters will be as follows but can be switched to whole months (e.g. 01/04/2026 – 30/06/2026) with HMRC, the deadline for each period remains the same if you change the period to whole months:

• Period 6th April to 5th July

  • By 7th August

• Period 6th July to 5th October

  • By 7th November

• Period 6th October to 5th January

  • By 7th February

• Period 6th January to 5th April

  • By 7th May

To do this you must record your transactions throughout the year in a Making Tax Digital for Income Tax ready software such as Xero, Free Agent or Quickbooks.  We recommend using Xero for this as we are able to provide you with training on how to use the software and can better assist you if you get stuck.

HMRC will write to you soon to notify you if you meet the criteria for needing to submit Making Tax Digital for Income Tax Returns from April 2026.  We expect these letters to come out after the 2024/25 self assessment has been filed and HMRC has assessed the return, though they may write to you before.

If your turnover is above £50,000 from a sole trade or a property (or both combined) for the 2024/25 tax year, HMRC will require Making Tax Digital submissions from April 2026 onwards, if it is more than £30,000, they will do the same from April 2027 onwards and from April 2028, the income threshold for MTD for ITSA will be lowered again to £20,000.

These returns will include sending HMRC a return for each quarter, an adjustments schedule (if applicable) at the end of the year and a final submission for the full year to include any other income that you may have (e.g. from employments or pensions).  This means that the way Self Assessment works for most people will fundamentally change from essentially having one submission per year to having up to six submissions for each year: four quarterly submissions within the year, one adjustment submission for the year and a finalisation submission to add in any other income.

The immediate upcoming changes relates to sole traders and property landlords but do not currently affect limited companies or partnerships, HMRC is planning to bring in Making Tax Digital for these but do not currently have a timescale.