Jul 7

2026

Making Tax Digital 2026: what the April rollout means for landlords and sole traders earning over £50,000

From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records, use HMRC-recognised software, and send HMRC quarterly updates. You will then submit your tax return through compatible software and pay any tax due by 31 January after the tax year ends.

Qualifying income means your gross income from self-employment and property before expenses. If you have both, the figures are added together. Employment wages, dividends, savings interest, State Pension and private pension income do not count towards the threshold.

This is the biggest shift in personal tax reporting since Self Assessment arrived, and our guide to how Making Tax Digital works covers the mechanics in plain terms.

Who the £50,000 threshold actually catches

The threshold catches people because it looks at combined income, not one source on its own. A freelance designer with £45,000 of turnover and £6,000 of rental income has £51,000 of qualifying income, so they are in from the first wave.

HMRC looks at the Self Assessment tax return you submitted in the previous tax year. For the April 2026 start, that means your 2024/25 return, which was due by 31 January 2026. HMRC should write to you if it thinks you need to join, but the responsibility is still yours. You need to check your position and sign up before you start using the service. If you run a small business alongside property, our note on how a tax accountant helps small businesses is worth a read.

What you actually have to do

There are 3 main duties once you are in scope. You must keep digital records of income and expenses, send quarterly updates for each relevant income source, and submit your tax return using compatible software after the year ends.

If you are both a sole trader and a landlord, you will usually send separate quarterly updates for each income source, but still submit one tax return. Spreadsheets can main duties once you are in scope. You must keep digital records of income and expenses, send quarterly updates for each relevant income source, and submit your tax return using compatible software after the year ends.

If you are both a sole trader and a landlord, you will usually send separate quarterly updates for each income source, but still submit one tax return. Spreadsheets can still be used if they connect to HMRC through compatible bridging software. Typing totals manually into HMRC is not enough. The official step by step guidance explains the process in more detail.

Moving to digital bookkeeping early is much less stressful than a last-minute scramble. Clean records also reduce the risk of errors that later need forensic accounting to untangle.

The deadlines that matter

Quarterly updates follow fixed deadlines. Your tax payment dates do not change, so 31 January and 31 July remain the key payment points where payments on account apply.

For the 2026/27 tax year, HMRC will not apply penalty points for late quarterly updates. You still need to send the updates before you can submit your tax return. Penalties can still apply for a late tax return or late payment.

Landlords, joint ownership and overseas property

Property brings its own wrinkles. If a property is jointly owned, only your share of the rental income counts towards your qualifying income. That means one owner can be in scope while another is not.

UK property and foreign property can both matter, depending on your UK tax residence and what is reported on your Self Assessment return. If you let property abroad, read our guidance on managing overseas property and UK tax rules when you have income in multiple countries. If foreign income is part of your position, it is also worth checking how to report foreign dividends and interest in the UK.

Getting ready without the stress

Accurate, real-time records do more than keep you compliant. They give you a clearer view of cash flow, which matters if the quarterly rhythm highlights a problem you had not spotted. If cash pressure appears, early recovery and restructuring advice is better taken sooner than later.

For a wider view across both jurisdictions, see what Making Tax Digital means for UK and Irish businesses. You can also confirm your own position using the GOV.UK MTD checker.

Frequently asked questions

Do I still have to file a Self Assessment tax return?
You still submit a tax return, but once you are mandated it must be done through compatible software after your quarterly updates.

What counts as qualifying income?
Gross income from self-employment and property, before expenses. Wages, dividends, savings interest and pensions are excluded.

What software do I need?
You need HMRC-recognised software, or bridging software that links your spreadsheet records to HMRC.

When is my first quarterly update due?
For the first standard period starting 6 April 2026, the update is due by 7 August 2026.

Does MTD change when I pay my tax?
No. Your payment dates stay at 31 January and 31 July. The reporting rhythm changes, not the payment calendar.

Talk to us before your first update falls due

If you are unsure whether you are in scope, or you want your systems ready head of the deadline, our SME business solutions team and cross-border accounting and tax specialists can set you up properly the first time. Get in touch with SCC Chartered Accountants to make the move to digital reporting a straightforward one.