We’re here to help you understand these changes and act with confidence.

How Income tax is reported to HMRC is going to change for millions across the UK with Making Tax Digital. 

From April 2026, the Government will begin rolling out Making Tax Digital (MAKING TAX DIGITAL) for Income Tax – a major shift designed to modernise the Self Assessment process, helping people keep clear and more accurate financial records throughout the year. It marks the biggest change to personal tax reporting since Self Assessment was introduced over 30 years ago.

For many homeowners, landlords, self‑employed individuals, or those earning extra income on the side, understanding these updates early will make for a smoother transition. This guide explains what Making Tax Digital  means, why it’s happening, and how you can prepare with confidence.

Making Tax Digital, a new digital approach to Income Tax 
Making Tax Digital is HMRC’s long‑term plan to move tax reporting fully online. Instead of collating everything annually for a traditional Self Assessment submission, individuals affected by the change will need to keep digital records and submit quarterly updates using HMRC‑recognised software.

The aim is to reduce errors, improve accuracy and transparency, and give taxpayers a clearer, more up‑to‑date view of their finances. This shift also helps reduce the last‑minute pressure many people face each January, creating a more manageable routine throughout the year.

Under this new system, you’ll record income and expenses digitally, submit figures to HMRC every three months via compatible software, and complete a year‑end Final Tax Return – replacing the existing annual Self Assessment process.

Who needs to join Making Tax Digital and when? 
Making Tax Digital for Income Tax is being phased in gradually over several years. Whether you need to join – and when – depends on your qualifying income which is gross income in the tax year, meaning your total earnings from self‑employment and property before expenses or allowances.

The rollout is as follows:

• April 2026: for individuals with qualifying income above £50,000
• April 2027: for individuals with qualifying income above £30,000
• April 2028: for individuals with qualifying income above £20,000

If you earn income from both property and self‑employment, those figures are combined to determine whether you meet the qualifying income threshold. HMRC will contact eligible individuals but will not sign you up automatically from the start – you’ll need to register yourself before your start date.

If you’ve only recently begun letting property or working for yourself, you do not need to start using Making Tax Digital for income tax until after you have submitted your first Self Assessment tax return. However, you can choose to sign up early if you prefer.

How the new digital system will work 
Once you’re required to use Making Tax Digital, you’ll need to keep all relevant income and expense records digitally.

Quarterly summary updates will be submitted directly through your chosen HMRC-recognised software. These reports do not calculate tax but allow HMRC to gain a clearer understanding of what you’re earning during the year. Quarterly updates are due by the 7th day of the month following the end of the quarter.

From April 2026, the deadlines for these submissions are 7th August, 7th November, 7th February and 7th May.

At the end of the tax year, you’ll complete a Final Tax Return which brings all income sources together, applies any allowances or adjustments, and calculates your final tax position. The deadline for this remains as the 31st January, aligning with today’s Self Assessment process.

For landlords, the system is slightly more detailed: you’ll need to keep digital records of rental income and submit separate quarterly updates for both rental and self‑employment income if you have both.

What these changes mean for landlords 
Making Tax Digital will apply to you if your rental income forms part of a total gross income that exceeds your relevant qualifying income threshold. That includes single‑property landlords, multi‑property landlords, and those earning property income alongside PAYE or self‑employment income. Rental income must be recorded digitally and included in your quarterly submissions and Final Tax Return submission to HMRC.

If you’re planning to grow your portfolio, streamline your accounting, or simply gain a clearer view of your rental finances, digital record‑keeping can help you stay more organised. It also makes conversations with accountants, financial planners or mortgage advisers much more straightforward.

How to stay ahead of these changes 
Even if Making Tax Digital doesn’t apply to you until 2027 or 2028, preparing early will make the transition smoother. Here are a few practical steps:

Check your income against the thresholds: Your most recent tax return will determine your start date. If your gross income exceeded £50,000, you’ll be included in the first phase from April 2026.

Explore HMRC‑recognised software options: There are both free and paid tools available, including bridging software for spreadsheet users. Trialling a few options early can help you find a system that feels intuitive.

Build digital habits: Keeping records up to date throughout the year will make quarterly submissions far easier and reduce the chance of mistakes.

Keep income sources clearly separated: If you are both a landlord and self‑employed, you’ll need to report each income stream separately under MAKING TAX DIGITAL. Starting that organisation now will save time later.

Your questions answered 

Do I still need to submit a Self Assessment return? 
During your transition year, yes. After that, Making Tax Digital replaces the annual Self Assessment with quarterly updates and a Final Tax Return.

Can I still use spreadsheets? 
Yes, as long as you use bridging software that digitally links your spreadsheet to HMRC’s system.

Is Making Tax Digital definitely happening in 2026? 
Yes, the Government has reconfirmed the April 2026 start date, with no further delays announced.

What happens if I miss a quarterly deadline? 
You may face penalties similar to the current Self Assessment system, so it’s important to keep on top of updates.

Does Making Tax Digital apply if I only rent out one property? 
Yes – if your total qualifying income exceeds the threshold for your start date. Landlords must keep digital records and report property income quarterly to HMRC.

As Making Tax Digital begins its phased rollout, staying informed and organised will make the transition far smoother. Although quarterly digital reporting may feel like a significant change, the goal is to create a clearer, more modern and more manageable way of handling your tax affairs.

If you would like to find out more about Making Tax Digital or our tax service, then call our dedicated team on 01623 885 572 (Mon-Fri, 9am – 5.30pm)

Any information provided to you does not count as tax advice and this article is not definitive tax guidance. Should you require assistance or are unsure about any detail in this article, we strongly recommend you speak to your accountant or a professional tax advisor.

Correct at the time of publishing – 13th March 2026