United Kingdom / Guides / Making Tax Digital: where the timeline stands
United Kingdom · guideMaking Tax Digital: where the timeline stands
The short answer
Making Tax Digital for VAT has been mandatory for all VAT-registered businesses since April 2022, regardless of turnover. Making Tax Digital for Income Tax is being phased in separately: it becomes mandatory from 6 April 2026 for sole traders and landlords with qualifying income over £50,000 (based on 2024-25 income), from 6 April 2027 for those over £30,000, and from 6 April 2028 for those over £20,000. Both regimes require digital records kept in compatible software rather than paper or spreadsheets alone, with a "digital link" between where a figure originates and where it is submitted to HMRC.
Key facts — verified dates on each
Two different programmes on two different clocks
Making Tax Digital is not one deadline — it is a programme that has rolled out tax by tax, in stages, since 2019. VAT and Income Tax are the two parts that matter for most sole traders, landlords, and small companies, and they run on entirely separate timelines with separate qualifying rules. A business can be fully compliant with MTD for VAT and still have no MTD for Income Tax obligation yet, or the reverse, depending on its income mix and turnover.
That separation is the source of most confusion: guidance and news coverage from 2022 about VAT does not describe what is happening with Income Tax now, and the Income Tax thresholds themselves have moved more than once since the programme was first announced, most recently narrowing the group required to join first.
MTD for VAT: already in force
Making Tax Digital for VAT has been mandatory for all VAT-registered businesses since April 2022, regardless of annual turnover — a change from the original 2019 rollout, which applied only to businesses trading above the VAT registration threshold. A VAT-registered business today, with very limited exemptions, keeps its VAT records digitally and submits VAT return figures to HMRC through compatible software rather than typing them into the HMRC portal by hand.
This part of the programme is settled and has been for several years. Where confusion persists it is usually about Income Tax being assumed to follow the same rules or the same start date as VAT, which it does not.
MTD for Income Tax: the phased rollout
Making Tax Digital for Income Tax applies to individuals with income from self-employment and/or property, assessed against a "qualifying income" test rather than a business turnover test. Qualifying income is the total gross income from self-employment and property before expenses, and the threshold that determines whether someone must join is based on the qualifying income reported for a specific earlier tax year, not the year the rule takes effect in.
The rollout narrows the threshold over three tax years: qualifying income over £50,000 in the 2024-25 tax year brings mandatory use from 6 April 2026; qualifying income over £30,000 in the 2025-26 tax year brings mandatory use from 6 April 2027; and qualifying income over £20,000 in the 2026-27 tax year brings mandatory use from 6 April 2028. HMRC has stated it intends to extend the requirement to those below the £20,000 threshold in the future, and separately that partnerships will be brought into MTD for Income Tax at a later date, but neither of those extensions has a confirmed threshold or start date yet.
Someone below the current threshold can choose to sign up voluntarily. Companies are not in scope of MTD for Income Tax at all — that regime applies to Income Tax Self Assessment, not Corporation Tax.
- 6 April 2026 — qualifying income over £50,000 (based on 2024-25)
- 6 April 2027 — qualifying income over £30,000 (based on 2025-26)
- 6 April 2028 — qualifying income over £20,000 (based on 2026-27)
- Below £20,000 — future extension planned, no confirmed date
- Partnerships — planned for a later phase, no confirmed date
What "digital records" and "compatible software" actually mean
Both parts of Making Tax Digital rest on the same underlying requirement: records relevant to the tax in question have to be kept digitally, in software that can communicate with HMRC's systems, rather than recreated or retyped by hand at the point of filing. For VAT this means the transaction-level detail behind a VAT return; for Income Tax it means income and expense records for each self-employment or property business.
The requirement that matters operationally is the "digital link" rule: once a figure exists in digital form, it has to move to wherever it is next used — a spreadsheet, bridging software, the return itself — through a digital transfer (an export, a formula, an API connection, a linked cell) rather than being manually retyped or copied and pasted. A spreadsheet on its own can satisfy MTD if it is combined with bridging software that creates that digital link to HMRC; what breaks compliance is a manual re-entry step anywhere in the chain from source record to submission.
For Income Tax specifically, "compatible software" additionally has to support sending quarterly updates to HMRC through the tax year and, eventually, the year-end submission that replaces the current Self Assessment return for the income covered.
What changes for someone brought into MTD for Income Tax
The mechanics of Income Tax Self Assessment change once someone is mandated into MTD for Income Tax. Instead of a single annual return, the process moves to quarterly updates submitted through compatible software during the tax year, followed by a year-end submission that finalises the figures and brings together any income not covered by the quarterly updates. HMRC has stated that no penalty points will apply to late quarterly updates for the 2026-27 tax year specifically — the first year the rule takes effect, covering the initial over-£50,000 cohort. That is a one-off transitional easement for 2026-27, not a rule that repeats for each new cohort: no equivalent easement has been announced for the £30,000 cohort joining in April 2027 or the £20,000 cohort joining in April 2028, and penalties for late payment of tax or a late final return apply throughout, including in 2026-27 itself.
None of this changes what Income Tax is owed or how it is calculated — MTD for Income Tax is a change to the recording and reporting mechanism, not a change to tax rates, allowances, or reliefs.
Where this fits for a UK sole trader or landlord today
The practical question for most sole traders and landlords is not whether MTD for Income Tax applies eventually — for many it will, on one of the three phased dates — but when their own qualifying income crosses a threshold and which tax year's income is used to test it. Because the threshold looks back at an earlier year's income rather than the current one, someone can be notified that they must join a full tax year or more before the requirement actually starts, and someone whose income fluctuates around a threshold needs to check each qualifying year separately rather than assuming one year's result applies going forward.
CapEasy serves accounting and compliance clients in the United States and Australia today. UK services, including support with Making Tax Digital compliance, are under consideration but not currently offered; this guide is provided for orientation only.
The figures, and when we checked them
These numbers change by year or by notification. Each one shows the date we last verified it against the source — if that date looks old, check the source before relying on it.
Questions on this
Is Making Tax Digital for VAT and Making Tax Digital for Income Tax the same thing?
No. They are separate parts of the same overall programme, with different qualifying rules and different timelines. MTD for VAT has applied to all VAT-registered businesses since April 2022. MTD for Income Tax is being phased in separately for sole traders and landlords based on income thresholds, starting April 2026.
Do I have to register for MTD for VAT separately if I am already VAT-registered?
VAT-registered businesses are expected to already be signed up, since the requirement has applied to all VAT-registered businesses since April 2022. A business newly registering for VAT is brought into MTD as part of registration.
What income counts toward the MTD for Income Tax threshold?
Qualifying income is the total gross income from self-employment and property combined, before expenses are deducted, as reported for the relevant earlier tax year used to test each phase.
Which year's income determines whether I have to join in April 2026?
The 2024-25 tax year's qualifying income determines whether the over-£50,000 threshold applies from 6 April 2026. The later phases look back at 2025-26 income for the £30,000 threshold and 2026-27 income for the £20,000 threshold.
What happens if my income is close to a threshold and moves around from year to year?
Each phase is tested against qualifying income for a specific earlier tax year, so a threshold being crossed one year and not another needs to be checked against the year that phase actually looks back at, rather than assumed from a single year's result.
Does MTD for Income Tax apply to limited companies?
No. MTD for Income Tax applies to Income Tax Self Assessment for individuals with self-employment and property income. It does not apply to Corporation Tax or to companies as such.
Can a spreadsheet satisfy Making Tax Digital?
A spreadsheet can be part of an MTD-compliant setup if it is connected to HMRC-recognised bridging software through a digital link, so figures move from the spreadsheet to the submission without manual retyping. A spreadsheet with no digital link to submission software does not on its own satisfy the requirement.
What is a "digital link" in Making Tax Digital terms?
A digital link is a transfer of data between software, a spreadsheet, or HMRC's systems that happens electronically — an export, an API connection, a linked formula — rather than by a person retyping or copying and pasting a figure from one place to another.
Will quarterly updates under MTD for Income Tax be penalised immediately?
No penalty points apply to late quarterly updates for the 2026-27 tax year, the first year the rule takes effect. That is a one-off transitional easement for 2026-27 only — HMRC has not announced an equivalent grace period for the £30,000 cohort joining in 2027 or the £20,000 cohort joining in 2028 — and penalties for late payment of tax or a late final submission apply throughout, including 2026-27.
Can someone below the current threshold join Making Tax Digital for Income Tax voluntarily?
Yes. Someone whose qualifying income is below the current mandatory threshold can choose to sign up before they are required to. Eligibility conditions and software-readiness requirements apply to voluntary sign-up in the same way they apply to mandatory sign-up.
Primary sources
- HMRC — Extension of Making Tax Digital for VAT (all VAT-registered businesses from April 2022)
- HMRC — Find out if and when you need to use Making Tax Digital for Income Tax
- HMRC — Sign up for Making Tax Digital for Income Tax
- HMRC — Penalties for Making Tax Digital for Income Tax
Last reviewed 2026-08-14. Statutes and schedules change — the sources above are authoritative, this page is orientation.
This page is information, not an offer of services. CapEasy serves the US and Australia today; UK services are under consideration.