Breaking: HMRC confirmed on 5 February 2026 that 864,000 sole traders and landlords must begin keeping digital records and filing quarterly updates from 6 April 2026. That is less than eight weeks away.
If you earn more than £50,000 a year from self-employment or property rental, this affects you directly. And if you have not started preparing, you need to act now.
What Is Changing on 6 April 2026?
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) replaces the traditional annual Self Assessment tax return with a new system of quarterly digital reporting.
From 6 April 2026, affected individuals must:
- Keep digital records of all income and expenses using HMRC-recognised software
- Submit quarterly updates to HMRC (four times a year instead of one annual return)
- File an End of Period Statement confirming your figures are correct
- Submit a Final Declaration replacing your Self Assessment return
This is not optional. It is the law.
Am I Affected?
You are in the first wave if your gross income from self-employment or property exceeded £50,000 in the 2024/25 tax year.
This includes:
- Landlords with rental income over £50,000 (even if your profit is lower)
- Sole traders with business turnover over £50,000
- Anyone with both — if your combined self-employment and property income exceeds £50,000
Important: If you are a landlord with a portfolio generating £55,000 gross rent but only £20,000 profit after expenses, you are still caught. The threshold is based on gross income, not profit.
The Phased Rollout
Not everyone is affected immediately. HMRC is rolling MTD out in stages:
| Start Date | Who’s Affected | Income Threshold |
|---|---|---|
| 6 April 2026 | Sole traders & landlords | Over £50,000 |
| 6 April 2027 | Sole traders & landlords | Over £30,000 |
| 6 April 2028 | Sole traders & landlords | Over £20,000 |
If you are currently below £50,000 but above £30,000, you have until April 2027 — but starting to prepare now is sensible.
Your New Quarterly Deadlines
For the 2026/27 tax year, these are the dates you will need to submit updates to HMRC:
| Quarter | Period Covered | Deadline |
|---|---|---|
| Q1 | 6 April – 5 July 2026 | 7 August 2026 |
| Q2 | 6 July – 5 October 2026 | 7 November 2026 |
| Q3 | 6 October 2026 – 5 January 2027 | 7 February 2027 |
| Q4 | 6 January – 5 April 2027 | 7 May 2027 |
| End of Period | Full year | 31 January 2028 |
Mark these in your calendar now. Missing them will eventually lead to penalty points.
What Software Do I Need?
You will need HMRC-recognised software that can store digital records, submit quarterly updates directly to HMRC, and generate End of Period Statements and Final Declarations.
Popular options include:
- Xero — Well-established, good for landlords with multiple properties
- FreeAgent — Popular with sole traders, free with some business bank accounts
- QuickBooks — Widely used, good integration with banking
- Sage — Trusted name, various packages available
- Hammock — Built specifically for landlords
Your accountant can help you choose the right software and set it up correctly. Many firms — including ours — handle the quarterly submissions on your behalf, so you do not need to learn the software yourself.
The Good News: A 12-Month Grace Period
Relief for Year 1: HMRC has confirmed a 12-month penalty grace period for the first year. During 2026/27, you will not receive penalty points for late quarterly submissions. Late submission penalties start from the second year (2027/28).
This gives you breathing room to get your systems running smoothly. But do not treat this as an excuse to delay — the obligation to file still exists from day one.
What Happens If I Do Nothing?
Ignoring MTD is not an option. From April 2027 onwards (after the grace period), HMRC will issue:
- Penalty points for each late quarterly submission
- £200 fine once you reach the penalty point threshold (4 points in a year)
- Interest charges on any tax paid late
- Potential further penalties for continued non-compliance
The penalty points system works like driving licence points — they accumulate and trigger fines.
Five Things to Do This Month
If you are affected by the April 2026 deadline, here is your immediate action plan:
1. Check Your Income
Review your 2024/25 tax return. Is your gross self-employment or property income over £50,000? If yes, you are in wave one.
2. Choose Compatible Software
Pick HMRC-recognised software (or ask your accountant to recommend one). Do not wait until April to set this up.
3. Start Keeping Digital Records Now
Even though MTD does not technically start until April, switching to digital record-keeping now means you will be comfortable with the process when it counts.
4. Talk to Your Accountant
If your current accountant has not contacted you about MTD, that is a concern. They should already have a plan for handling your quarterly submissions.
5. Book a Free Consultation
If you do not have an accountant — or want a second opinion — we offer a free, no-obligation consultation to assess your MTD readiness.
How HS Global Accountancy Can Help
We have been preparing for MTD since HMRC first announced it. As MTD specialists for landlords and the self-employed, we handle:
- Software setup — We recommend and configure the right tool for your situation
- Quarterly submissions — We file your updates with HMRC so you do not have to
- Digital record-keeping — We show you the simplest way to capture income and expenses
- Year-end compliance — End of Period Statements and Final Declarations, handled
- Ongoing support — Questions throughout the year, answered promptly
Our self-employed packages start from £39/month, and we offer a free MTD readiness assessment to help you understand exactly what is required.
Don’t Leave It Until April
Get your free MTD readiness assessment today. We’ll review your situation and tell you exactly what you need to do before 6 April 2026.
HS Global Accountancy is a UK accountancy practice based in Harrow, specialising in Making Tax Digital compliance for landlords, sole traders, and small businesses. We are registered with HMRC and use HMRC-recognised software for all MTD submissions.