Making Tax Digital for the self-employed: what changes and when

Who has to join, and from when

Making Tax Digital for Income Tax (MTD for Income Tax) is phased in by qualifying income. For self-employed people, that means gross turnover: the money your business takes in, before any expenses come off. Once you are in, you sign up before your first update; our guide to signing up for Making Tax Digital explains how. Your profit does not decide whether you are in.

• Qualifying income over £50,000: from 6 April 2026
• Over £30,000: from 6 April 2027
• Over £20,000: from 6 April 2028

If your qualifying income is £20,000 or less, you are not yet required to join.

Rental income counts too. Add your gross rents to your self-employment turnover. A decorator with £24,000 of turnover and £9,000 of rent has qualifying income of £33,000, so they are over the £30,000 line even though neither source is large on its own. Our guide to MTD income thresholds goes into how this is measured, and GOV.UK explains who must use MTD and when.

Some people are exempt automatically. Anyone whose 2024/25 Self Assessment return included the SA109 residence pages is exempt until April 2027 without applying, and carries on filing an ordinary Self Assessment return. If you cannot use digital tools, you can apply for a digital exclusion exemption. GOV.UK sets out who can get an exemption.

What you do through the year

Once you are in, you keep digital records of your income and expenses in compatible software. Expenses are grouped into HMRC’s self-employment categories, such as cost of goods or materials, car, van and travel, and phone, stationery and admin.

You then send HMRC four quarterly updates a year. Each one is a running total. In GOV.UK’s words, each update “will cover from the start of the tax year to the end of the update period, not just the previous three months.”

You can choose calendar update periods instead, running from 1 April, with the same deadlines. The choice is made in your software, for each income source, before your first update. See standard or calendar quarters if your accounts run to 31 March.

Each self-employment business has its own quarterly updates, and so does any UK or overseas property income. There is still just one tax return.

The tax return at year end

After the tax year ends on 5 April, you submit a tax return through software by 31 January (HMRC previously called this the final declaration). For 2026 to 2027, that is 31 January 2028. You can file earlier, but all your quarterly updates must be sent first.

The year before you join is still done the old way. If you joined in April 2026, your 2025 to 2026 Self Assessment return is due by 31 January 2027 as normal. GOV.UK covers submitting your MTD tax return.

Worked example: Sarah, a self-employed plumber

Sarah expects turnover of £58,000 this year. That is over £50,000, so she has been in MTD since 6 April 2026. She uses standard update periods.

Between 6 April and 5 July she takes £14,200, spends £3,100 on materials, £850 on van and travel costs, and £120 on her phone and admin. Her first update, due by 7 August, shows exactly those figures.

In the next three months she takes £15,300, with £3,300 on materials, £870 on the van and £120 on phone and admin. Her second update, due by 7 November, covers 6 April to 5 October:

Notice she does not send £15,300 on its own. The second update repeats the first quarter’s figures plus the new ones. If she spots a mistake from the spring, she simply corrects it in her records and the next update carries the right total.

Sarah’s phone is also her personal phone, so she claims only the business share. If she worked as a CIS subcontractor, her income figure would be the gross amount before the contractor’s deductions, with those deductions recorded separately as tax already paid.

What stays the same

The way your tax is calculated does not change. Allowable expenses, the £1,000 trading allowance and the simplified mileage rate all work as before. You still pay Class 4 National Insurance through Self Assessment.

Payment dates are unchanged too. Quarterly updates carry no tax payment, so sending one does not mean paying anything. Your bill is still settled on the usual Self Assessment dates, including 31 January.

Penalties in the first year

For 2026 to 2027, HMRC gives no penalty points for late quarterly updates to anyone who joined in April 2026. A late tax return and late payment are still penalised from the start, so 31 January matters as much as ever.

From 2027 to 2028, each late quarterly update earns one point. A point carries no charge by itself. A £200 penalty is charged only when you reach 4 points, and points below that expire after 24 months. If you do miss an update, you still need to send it before the next one. GOV.UK explains the penalty points system.

Where Quarterwise fits

Quarterwise is light bookkeeping software for the self-employed and landlords. It uses HMRC’s self-employment expense categories, sends invoices, records CIS deductions separately from income, and files both your quarterly updates and your tax return, including other income such as interest, dividends or employment.

The Free plan covers one self-employment business with full filing to HMRC and deadline reminders. Pro, at £12 a month or £99 a year, adds unlimited businesses, receipt capture and a live tax estimate.

This guide is general information, not tax advice. If your situation is complicated, speak to an accountant.

Common questions

Last updated 6 October 2026. Quarterwise is software, not a tax adviser — if you’re unsure how the rules apply to you, check with HMRC or a qualified accountant.