When Does Making Tax Digital Start: Your 2026 Compliance
Making Tax Digital for Income Tax starts on 6 April 2026 for people with qualifying income above £50,000 in the 2024/25 tax year. It then expands to £30,000 from 6 April 2027 and £20,000 from 6 April 2028.
If you're a freelancer, landlord, or sole trader, you've probably seen the phrase everywhere and still felt none the wiser. That's normal. Most of the confusion comes from people treating MTD like a vague future tax project, when in reality it's a dated compliance change with specific thresholds, specific software requirements, and very little room for last-minute improvisation.
Making Tax Digital Is Coming Are You Ready
A lot of small business owners first hear about MTD in the worst possible moment. You're already juggling invoices, chasing payments, sorting receipts, and trying to remember whether that subscription was personal or business. Then someone mentions “quarterly updates” and “compatible software” and it sounds like HMRC has decided to turn tax into an IT project.
That reaction makes sense. But the practical truth is simpler than the jargon.
Making Tax Digital for Income Tax starts for many people on 6 April 2026. If that date applies to you, the smart move is to prepare early and calmly, not panic late.
This isn't HMRC's first digital rollout
One reason I'm fairly blunt about this is that MTD isn't an experiment. MTD for VAT started in April 2019 for many businesses above the VAT threshold, extended to certain complex organisations in October 2019, and reached all VAT-registered businesses and organisations by April 2022, according to the Making Tax Digital VAT rollout history.
That matters because it tells you two things:
- HMRC phases these changes in: It rarely lands on everyone at once.
- Digital compliance sticks: Once a tax regime moves into MTD, businesses are expected to adapt their systems, not wait for a reversal.
Practical rule: Treat MTD for Income Tax like a live project with a start date, not a policy discussion.
What most people are really asking
When clients ask, “When does making tax digital start?”, they usually mean one of three things:
| What they mean | What they need to know |
|---|---|
| “When does it start in general?” | The first Income Tax phase begins on 6 April 2026 |
| “When does it start for me?” | That depends on your qualifying income |
| “What do I need to change?” | Your records, software, and filing routine |
The mistake is focusing only on the first question. The date matters, but your process matters more. If you still rely on paper receipts, disconnected spreadsheets, or a once-a-year cleanup, MTD will feel painful. If you build a digital routine now, it becomes manageable.
My advice
Don't wait for HMRC letters to tell you what your business already should be fixing. Clean books, digital records, and proper software aren't just for compliance. They make your business easier to run.
What Making Tax Digital Actually Means for You
MTD changes tax from a once-a-year scramble into a regular digital process. The old model let many people leave bookkeeping in a drawer until deadline season. The new model expects your records to stay current and your reporting to happen through software.
Under the old approach, HMRC mostly saw your year in one annual bundle. Under MTD, HMRC gets regular digital updates instead of waiting for one big catch-up.
The three changes that matter
The formal language can be clunky, so strip it back to the essentials.
- You must keep digital records. That means your income and expenses need to live in a digital system, not only in paper files or a bag of receipts.
- You must use functional compatible software. In plain English, that means software that can work with HMRC's system properly.
- You must send quarterly updates. MTD moves you away from relying only on one annual submission.
What counts as software
People often overcomplicate things. You do not need a giant finance stack. But you do need tools that work together properly.
For many small businesses, that means some mix of:
- Accounting software such as Xero or QuickBooks
- Receipt capture tools for collecting and extracting expense data
- Bridging tools if you still use spreadsheets as part of the process
A spreadsheet on its own isn't automatically the problem. The problem is a broken process. If someone is manually retyping figures from one place to another, that's exactly the kind of friction MTD is trying to eliminate.
Keep one principle in mind. Your records should flow through your system digitally, with as little manual re-entry as possible.
What this means day to day
You'll need a more disciplined rhythm. Not more drama. Just more consistency.
That usually means:
- Capture documents quickly
- Categorise transactions regularly
- Review your books during the year, not after it
- Use software that can support compliant submissions
If you already stay on top of your bookkeeping monthly, MTD is an adjustment. If you do everything annually, it's a habit change.
The MTD Rollout Timeline Who Is Affected and When
The cleanest answer to “when does making tax digital start” is that it depends on which tax and which threshold you're talking about. VAT went first. Income Tax is next.
Start with the visual timeline, then check the table beneath it against your own income.
The confirmed Income Tax dates
According to HMRC's guidance on when you need to use Making Tax Digital for Income Tax, MTD for Income Tax starts from 6 April 2026 for taxpayers with qualifying income above £50,000 in the 2024/25 tax year. It then expands to £30,000 from 6 April 2027 and £20,000 from 6 April 2028.
Here's the timeline in a form most business owners can use:
| Start date | Who comes into scope |
|---|---|
| 6 April 2026 | Taxpayers with qualifying income above £50,000 in 2024/25 |
| 6 April 2027 | Taxpayers with qualifying income above £30,000 |
| 6 April 2028 | Taxpayers with qualifying income above £20,000 |
What “qualifying income” means in practice
Many people stumble at this point. They hear income and think profit. That's not how you should approach the test.
For practical purposes, look at the income you receive from self-employment, property, or both, and check whether that puts you into the relevant threshold for the relevant tax year. If you're unsure where you fall, review this guide to the Making Tax Digital threshold and then confirm it with your accountant before you assume you're out of scope.
If your numbers are close to a threshold, don't guess. Check them properly. A bad assumption made in one tax year becomes a compliance problem in the next one.
The first date isn't the only date that matters
People fixate on April because that's the legal start point. Fair enough. But operationally, the pressure starts right after that. Once you're in scope, your systems have to be ready to function on day one.
This short explainer gives a useful overview of the wider shift businesses are preparing for:
My view on the timeline
If you're likely to be caught in the first wave, act like your deadline is earlier than the law says. Not because HMRC moved the date, but because changing habits, software, and record keeping takes longer than most sole traders expect.
Understanding MTD Exemptions and Special Rules
Not everyone has to comply in the same way, and some people won't have to comply at all. That doesn't mean you can just opt out because you prefer paper. HMRC doesn't treat inconvenience as an exemption.
Who may be exempt
Some taxpayers may have grounds to claim exemption where digital compliance is not reasonably practical. In real life, that usually comes up in situations such as digital exclusion, serious accessibility barriers, or religious objections to using electronic systems.
The point is simple. Exemption is about genuine inability or recognised grounds, not reluctance.
What to do if you think this applies to you
If you believe MTD isn't reasonably workable for you, speak to your accountant first and then take it up with HMRC properly. Don't ignore the rules and hope your circumstances will explain themselves later.
A sensible process looks like this:
- Assess the reason clearly: Be specific about why digital compliance isn't practical in your case.
- Keep supporting evidence: If your position depends on health, access, or another serious issue, make sure you can support it.
- Get advice before deadlines hit: It's easier to sort this before you're expected to comply than after you've already missed obligations.
Special cases need individual advice
Some business structures and shared income arrangements don't fit neatly into a one-person, one-trade model. That's why broad online summaries can be misleading. If you're a landlord, have mixed income sources, or operate in a structure that isn't straightforward, read this overview of when MTD for Self Assessment starts and then get specific advice.
The worst approach is assuming your setup is “probably standard” when it isn't.
If your affairs are simple, the rules are easier to apply. If they aren't, get clarity early. Tax confusion gets more expensive when software, deadlines, and reporting all depend on getting the basics right.
Your Practical MTD Preparation Checklist
This is the part that matters most. Dates are useful, but preparation is what keeps you compliant.
Once MTD applies, you'll need digital records, quarterly updates through functional compatible software connected to HMRC APIs, and digital correction processes. ICAEW also notes that the first quarterly update for the 6 April to 5 July 2026 quarter is due on 7 August 2026, as set out in ICAEW's MTD for Income Tax guide.
That deadline is close enough to the start date that you really can't afford a slow setup.
Step one and two
Check whether your start date is likely to be 2026, 2027, or 2028. Base that on your qualifying income, not guesswork.
Audit your current bookkeeping thoroughly. Ask yourself:
- Are receipts still sitting in pockets, vans, and kitchen drawers?
- Do you update records weekly, monthly, or only near deadlines?
- Are you retyping figures from paper into spreadsheets or software?
If your answer to any of that sounds messy, fix the process now, not when MTD goes live.
Step three and four
Choose the right software stack. For many small businesses, that means accounting software such as Xero or QuickBooks, plus a way to digitise source documents consistently. If you want a simpler front end for receipts, Snyp's guide to MTD for the self-employed is worth reading, and Snyp itself is one option for capturing receipts from WhatsApp, email, or file upload and pushing structured data into accounting systems.
Stop treating receipts as admin debris. They're part of your digital audit trail. If you still spend time downloading PDFs, renaming files, and manually keying values, tools that automate tax document processing can help reduce the manual handling before records reach your accounts.
Step five and six
Run a dry version of your new routine. Don't wait for the legal start date. Spend a few months working as if MTD already applies. Capture receipts digitally. Reconcile regularly. Review categories. Spot the weak points while the consequences are low.
Get your accountant involved before software choices harden. I see this mistake constantly. A business picks tools based on price or a flashy demo, then discovers the workflow is awkward, duplicate-heavy, or accountant-unfriendly.
A practical checklist you can act on this week
- Review your threshold position: Work out whether you're likely to fall into the first, second, or third phase.
- Pick a record-keeping method: Xero, QuickBooks, or a spreadsheet-plus-bridging setup can work if it's built properly.
- Create a capture habit: Forward emailed receipts, scan paper ones immediately, and stop building a backlog.
- Test your categories: Make sure income and expenses are being coded consistently.
- Book an accountant review: A short review now is cheaper than fixing a bad workflow later.
Good MTD preparation isn't about buying more software. It's about removing manual gaps from the path between transaction and submission.
Frequently Asked Questions About MTD
Are quarterly updates the same as quarterly tax payments
No. A quarterly update is a reporting requirement. It isn't the same thing as saying your tax is automatically paid every quarter in the same way.
People confuse reporting frequency with payment timing. Don't mash those together. They're different issues.
Can I still use spreadsheets
Sometimes, yes. But a spreadsheet isn't a compliance strategy by itself.
What matters is whether your overall setup keeps proper digital records and moves data through a compliant digital process without clumsy manual re-entry. If your spreadsheet is just a staging post inside a proper system, that can be workable. If it's a manual patchwork, it probably isn't.
What should I look at to decide if I'm in scope
Look at your qualifying income from self-employment, property, or both. Don't rely on a rough memory of last year's profit and assume that answers the question.
If you're near a threshold, verify it properly with your records and accountant.
What happens if I leave this until the last minute
Usually, one of three things happens:
- You choose software too quickly
- Your bookkeeping routine stays half-manual
- Your first reporting cycle becomes stressful for no good reason
That's avoidable. MTD rewards tidy systems and punishes delay.
What's the simplest way to think about MTD
Think of it as a bookkeeping discipline change, not just a tax filing change. If your records are current, digital, and well organised, the reporting side becomes much easier.
If you want a low-friction way to keep receipts digital before MTD deadlines start biting, Snyp is built for exactly that kind of workflow. It captures receipts from WhatsApp, email, or uploads, extracts the key data, and helps push cleaner expense records into tools like Xero and QuickBooks so your books stay current instead of becoming a year-end rescue job.