The phased timeline at a glance
MTD for Income Tax is introduced in waves, decided by your gross combined self-employment and property income (turnover before expenses), not your profit:
| Start date | Qualifying income over | Who joins |
|---|---|---|
| 6 April 2026 | £50,000 | Sole traders & landlords above £50k |
| 6 April 2027 | £30,000 | Those between £30k and £50k |
| 6 April 2028 | £20,000 | Those between £20k and £30k |
| Under review | Below £20,000 | No confirmed date; kept under review |
Every quarterly deadline (2026/27 tax year)
Once in MTD you file four cumulative quarterly updates plus a final declaration. Using HMRC’s standard quarters, the first-year schedule is:
| Quarter | Period covered | Deadline |
|---|---|---|
| Q1 | 6 Apr 2026 – 5 Jul 2026 | 7 August 2026 |
| Q2 | 6 Jul 2026 – 5 Oct 2026 | 7 November 2026 |
| Q3 | 6 Oct 2026 – 5 Jan 2027 | 7 February 2027 |
| Q4 | 6 Jan 2027 – 5 Apr 2027 | 7 May 2027 |
| Final declaration | Whole 2026/27 year | 31 January 2028 |
You can elect for calendar quarters (ending 30 Jun, 30 Sep, 31 Dec, 31 Mar) instead; the deadlines stay the same.
The key numbers, in one place
| What | Figure |
|---|---|
| First MTD ITSA start date | 6 April 2026 |
| First quarterly update due | 7 August 2026 |
| Phase 1 income threshold | £50,000 (gross) |
| Phase 2 threshold (Apr 2027) | £30,000 |
| Phase 3 threshold (Apr 2028) | £20,000 |
| Quarterly updates per year | 4 |
| Final declaration deadline | 31 January after the tax year |
| Late submission penalty threshold | 4 points (quarterly filers) |
| Penalty at threshold | £200 |
| First-year penalty-point easing | 12 months (late quarterly updates only) |
| VAT registration threshold | £90,000 (rolling 12 months) |
What counts as qualifying income
The threshold test uses gross income — turnover before any expenses — from self-employment and UK property, added together. It is not your taxable profit, which is why the rules catch more people than expected. A trade turning over £42,000 plus £12,000 of rent is £54,000 of qualifying income, so it is in from April 2026 even if the taxable profit is far lower. Employment (PAYE) income, pensions, savings interest and dividends do not count.
Penalties in 2026
Late quarterly updates and final declarations use a points-based system: one point per late submission, and a £200 penalty once you reach four points. Late payment of tax is charged separately, with interest. Importantly, those mandated from 6 April 2026 benefit from a 12-month easingduring which no penalty points are issued for late quarterly updates — though the final declaration and late-payment charges still apply.
What you need to be ready by April 2026
- HMRC-recognised software (or a spreadsheet plus bridging software)
- Digital records running from 6 April 2026 — day one of the tax year
- MTD sign-up through your HMRC account, with the software authorised
- A Self Assessment registration and UTR already in place (the one step only you can do)