Making Tax Digital, explained without the sales pitch

Nearly everything written about Making Tax Digital ends with a free trial button, which makes it hard to tell the rules from the sales pitch. Here is the rules half on its own.

The test is gross, and it adds up

MTD for Income Tax becomes mandatory on 6 April 2026 for anyone whose gross self-employment plus property income passed 50,000 GBP on the 2024/25 return. The threshold drops to 30,000 in April 2027 and 20,000 in April 2028, and the first wave’s first quarterly update is due by 7 August 2026. Checked 2026-08-22 against LITRG’s MTD timetable and the gov.uk MTD collection.

The thresholds look at gross income, turnover before a single expense, and they add self-employment and property together. A freelancer clearing 28,000 of profit on 55,000 of turnover was in the first wave; a landlord with 26,000 of rent plus 26,000 of freelance turnover crossed the 2026 line even though neither side alone did. Our MTD date checker gives you your April.

What changes in April, and what does not

In: digital records in recognised software, four light-touch quarterly updates of income and expenses, and a final declaration. Out: the single January return you used to file. NOT changing: what tax you pay, when you pay it (31 January and 31 July survive intact), or your paper receipts shoebox becoming illegal; scanning into software counts.

The penalty system is points, not fines

A missed quarterly update earns a point; at four points a 200 GBP fine lands and further misses fine again. Points expire after two years of good behaviour. Translation: one late quarter is survivable, a habit is not, and the cheap move is starting the software habit a quarter early rather than in the panic week.

Choosing software without the upsell

HMRC keeps a public list of recognised software, including free options for simple cases; spreadsheet users can keep the spreadsheet with bridging software on top. The 30-a-month tier the adverts push exists for VAT groups and payroll, not for a freelancer with twelve invoices a quarter. Match the tool to your actual complexity and revisit at year one.