Making Tax Digital for Income Tax: set up and done for you

In short: Making Tax Digital for Income Tax changes how sole traders and landlords report to HMRC: digital records, quarterly updates and a tax return sent through compatible software. AF Coopers & Co, ACCA Chartered Certified Accountants in Woodford Green, checks whether it applies to you, sets up the software and sends the updates for you.

Who it applies to, and when

You need to use Making Tax Digital for Income Tax if you are a sole trader or landlord registered for Self Assessment and your qualifying income from self-employment and property is over the threshold:

HMRC reviews your Self Assessment tax return each year to check your qualifying income and writes to you if you need to sign up. If you think you cannot use digital tools, HMRC explains on gov.uk when you can apply for an exemption. You can check your position with our free Making Tax Digital checker, on gov.uk, or ask us.

What you have to do

• Keep digital records of your self-employment and property income and expenses
• Use software that works with Making Tax Digital for Income Tax
• Send HMRC a quarterly update for each business and property income
• Submit your tax return through the same software by 31 January after the end of the tax year

Quarterly update deadlines

Rules, thresholds and deadlines checked on gov.uk on 3 October 2026.

Penalties

For the 2026 to 2027 tax year, HMRC will not apply penalty points for late quarterly updates, although you must still send them before you can submit your tax return. From then on, each late quarterly update or tax return gets a penalty point, and reaching 4 points means a £200 penalty, with another £200 for each further missed deadline. Late payment of tax brings separate penalties and interest. (Source: gov.uk.)

What we do for you

• Check whether and when Making Tax Digital applies to you, using your real figures
• Help you choose compatible software and set it up, including in Xero or QuickBooks
• Move your records from spreadsheets or paper into digital records
• Keep your records for you, or review the records you keep
• Send your quarterly updates to HMRC as your agent
• Prepare and submit your tax return through the software
• Explain what you owe and when, including payments on account

For sole traders

If you are self-employed, we set up your records so your quarterly updates come straight from your day-to-day bookkeeping. That means less work at year end and a clearer view of your tax bill during the year. See our bookkeeping service.

For landlords

Rental income counts towards your qualifying income. We keep your property income and expenses in the right format, send the quarterly updates and prepare your Self Assessment tax return. See our accountants for landlords page.

Prices

Your fee depends on how many businesses and properties you have, and whether we keep your records or review yours. We confirm a fixed fee in writing before we start. For context, our Self Assessment service starts from £149 and sole trader accounts from £249.

How it works

1. Free 20-minute call. We check whether Making Tax Digital applies to you and from when.
2. Software and records. We help you choose software and set up your digital records.
3. Every quarter. We send your update to HMRC and tell you how the year is going.
4. Year end. We submit your tax return through the software and tell you what to pay and when.

Related

• Guide: Making Tax Digital for Income Tax
• Self Assessment tax returns
• Allowable expenses: what can you claim?

Who will do the work

Common questions

Does Making Tax Digital for Income Tax apply to me?

It applies to sole traders and landlords registered for Self Assessment whose qualifying income from self-employment and property is over the threshold: from 6 April 2026 if it was over £50,000 in the 2024 to 2025 tax year, from 6 April 2027 if over £30,000 in 2025 to 2026, and from 6 April 2028 if over £20,000 in 2026 to 2027. HMRC checks your tax return and writes to you if you need to sign up.

What do I have to do?

Keep digital records of your self-employment and property income and expenses, use software that works with Making Tax Digital, send HMRC an update every quarter, and submit your tax return through that software.

When are the quarterly updates due?

For the standard update periods: 7 August (for 6 April to 5 July), 7 November (to 5 October), 7 February (to 5 January) and 7 May in the following tax year (to 5 April).

What happens if I send a quarterly update late?

HMRC will not apply penalty points for late quarterly updates during the 2026 to 2027 tax year, but you must still send them before you can submit your tax return. After that, each late quarterly update gets a penalty point, and 4 points means a £200 penalty.

Which software should I use?

You need software that works with Making Tax Digital for Income Tax. We work in Xero and QuickBooks and will help you choose software that suits how you keep your records.

Can you send the quarterly updates for me?

Yes. Once you authorise us as your agent, we can keep or review your digital records, send your quarterly updates and submit your tax return.

I am a landlord with a joint property. Does it apply?

It depends on your share of the income and your other qualifying income. Ask us and we will work it out with you.

General information only, not personal advice. Tax rules, rates and thresholds change, so please check gov.uk or speak to us about your own situation.