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What Making Tax Digital for Income Tax is

Making Tax Digital for Income Tax is a new way of reporting income and expenses if you鈥檙e a sole trader or landlord. You鈥檒l need to use software that works with Making Tax Digital for Income Tax听迟辞:听

• create, store and correct digital records of your business income and expenses 聽
• send your quarterly updates to HMRC鈥���
• submit your tax return and pay tax due by 31 January the following year

Who should sign up and when

Making Tax Digital for Income Tax is currently voluntary. You may be able to sign up to help us test and develop the service. If you want to sign up at this stage, you can choose whether you want to sign up:

• for testing
• early, so you are prepared to use the service

HMRC will check that you鈥檙e eligible to sign up based on the details that you provide.

From 6 April 2026, you may need to use Making Tax Digital for Income Tax. Whether you need to sign up depends on your total annual income from self-employment or property.

If you use an agent, they can sign you up instead.

If you know when you need to sign up, you can read聽use Making Tax Digital for Income Tax聽to find out more information about:

• what to expect after you sign up
• the different steps you will need to take during the tax year
• help and support

If you want to sign up now

You will still need to聽send a Self Assessment tax return聽for the 2024 to 2025 tax year.

If you need to sign up in the future

You can either:聽

• sign up to test the service now 鈥� for all your self-employment and property income sources
• continue sending a Self Assessment tax return as normal and sign up at a later date

Who can sign up voluntarily

We鈥檒l ask you some questions when you sign up. This will confirm if you鈥檙e able to sign up voluntarily. 聽

You can sign up voluntarily if (all of the following):

• your personal details are up to date with HMRC
• you鈥檙e a UK resident
• you have a National Insurance number
• you have submitted at least one Self Assessment tax return
• you鈥檙e up to date with your tax records 鈥� for example, you have no鈥痮utstanding tax liabilities
• you use an accounting period that runs from either:
  • 6 April to 5 April
  • 1 April to 31 March 鈥� you must make sure your software can support this accounting period

Who cannot sign up voluntarily

You cannot sign up voluntarily if you:

• have a payment plan with HMRC
• are a partner in a partnership
• claim Married Couple鈥檚 Allowance
• claim Blind Person鈥檚 Allowance
• are currently, or are going to be, bankrupt or insolvent
• are an MP, minister of religion or Lloyds underwriter
• have income from being a foster carer or being in a shared lives scheme
• have income from a trust
• have income from a furnished holiday let
• are subject to a compliance enquiry
• use 鈥榓veraging鈥� or other arrangements because your profits vary between years 鈥� for example, because you鈥檙e a farmer, writer or artist
• are signing up on behalf of someone else (unless you鈥檙e an agent) 鈥� this includes (but is not limited to) if you鈥檙e:
  • an insolvency practitioner
  • a nominee
  • a solicitor

Before you sign up

You鈥檒l need to get聽software that works with Making Tax Digital for Income Tax. When choosing software, always check with the software provider to make sure it meets your needs.

You鈥檒l need:

• your National Insurance number
• your business start date or the date you started receiving property income (if this is within the last 2 tax years)
• your accounting method such as聽cash basis accounting听辞谤听traditional accounting
• the tax year you would like to start using Making Tax Digital for Income Tax

If you鈥檙e a sole trader, you鈥檒l also need:

• your business name 鈥� this is the name you use on your invoices
• your business address
• the nature of your business (your trade)

If you have multiple income sources, you鈥檒l need to sign up each one for Making Tax Digital for Income Tax.

Your accounting period

You can use an accounting period that runs from 1 April to 31 March, if the software you choose supports this. To use this accounting period you must:

• select calendar update periods in the software before the first update is made
• make an adjustment at the end of your first tax year 鈥� so that your income and expenses from 1 April to 5 April are included in your tax return

How penalties apply to you

HMRC鈥檚 new penalties will apply to you if you miss deadlines for:

• submitting your tax return
• paying your bill

You will not receive a penalty during the testing phase for missing a deadline for submitting a quarterly update.

You should聽read more information about the new penalties and when they apply.

We鈥檒l write to you to confirm when you鈥檝e become liable for these penalties.

How to sign up

You鈥檒l need the user ID and password you got when you signed up for Self Assessment.

You may be asked to provide further proof of your identity to use this service. You can do this by:聽

• using an app on your mobile phone to match a photo of your face to your passport or driving licence
• answering questions about information we already hold about your identity 鈥� for example, passport, credit reference, driving licence, Self Assessment, latest P60, or a recent payslip

Next steps

You still need to聽send a Self Assessment tax return聽for the tax year before you started using Making Tax Digital for Income Tax.

Read more information about how to聽use Making Tax Digital for Income Tax.

If you have a query about your software (such as creating records and sending updates), contact your software provider.