From 6 April 2026, MTD for Income Tax applies to sole traders and landlords whose total qualifying gross income from self-employment and property exceeds £50,000 in the 2024/25 tax year. 

Importantly, it is your 2024/25 qualifying income that determines if you are required to use MTD from April 2026. If your income has since fallen below £50,000, you should not assume that you are outside the new rules. If you exceeded the threshold in 2024/25, you may still be required to use MTD for the 2026/27 tax year. 

Qualifying income means your total gross income from self-employment and property before expenses, rather than your taxable profit. 

Those within scope need to keep digital records using compatible software and submit quarterly updates to HMRC as part of the new reporting requirements.  

From September, HMRC will start automatically signing up people it believes should have joined MTD in April. The process will happen in stages over the following months.  

If HMRC signs you up, you should receive a letter or digital message explaining what has happened and what you need to do next. 

Importantly, you will also be asked to check the information HMRC holds about your businesses and property income. 

HMRC will largely be working from historic tax return information. This means its records may not reflect more recent changes, such as a business ceasing to trade or the sale of a rental property.

If you believe you should already be within MTD, our advice is to take action rather than wait for HMRC to sign you up. 

You or your adviser can still complete the process now. This gives you an opportunity to check that HMRC holds the right information and get your software and digital records in order. 

It’s particularly important to seek advice if you believe HMRC may incorrectly identify you as being within scope, or if you think you qualify for an exemption. Some exemptions require an application to HMRC rather than being applied automatically.

If you should have been using MTD since April but haven’t yet registered, there is some reassurance. 

There are no penalty points for late quarterly updates during 2026/27. Because the updates are cumulative, HMRC has confirmed that taxpayers brought into the system later in the year won’t need to submit every missed update separately and can catch up through a subsequent submission.  

However, this doesn’t mean quarterly reporting is optional. Those within MTD will still need to meet the requirements for the year and submit their 2026/27 tax return using MTD-compatible software.  

If you’re a sole trader or landlord, now is a good time to check: 

• whether your qualifying gross income exceeded £50,000 in 2024/25 and MTD therefore applies to you from April 2026 
• that HMRC holds the correct information about your income sources  
• that your digital records are up to date  
• that you’re using suitable MTD-compatible software  
• if any exemption may apply to your circumstances.  

HMRC’s decision to begin automatically signing up taxpayers makes clear that it expects those within scope to move onto the new system. 

With the next MTD quarterly deadline falling on 7 November 2026, covering the current 2026/27 tax year, and the Self Assessment deadline of 31 January 2027 relating to the 2025/26 tax year, the coming months will be important for making sure your tax affairs are accurate and up to date. While the two reporting obligations relate to different tax years and do not directly overlap, considering them together may highlight useful tax planning opportunities and help you manage cashflow more effectively. 

If you’re unsure if MTD applies to you, haven’t yet registered or need help getting your records ready, speak to Daniel Wilton or contact your usual Old Mill adviser. We can review your position and help you take the appropriate next steps.