Making Tax Digital for Income Tax: Self-Employed and Landlords Move to Quarterly Filing from April 2026
From April 2026, self-employed individuals and landlords earning over £50,000 must adopt Making Tax Digital (MTD), replacing annual tax returns with quarterly digital updates to HMRC. New penalty rules also arrive in phases, moving from fixed fines to a points-based system.
Quarterly Reporting and Digital Record-Keeping Mandatory
From April 2026, if you are within the scope of Making Tax Digital for Income Tax, you will be required to send updates to HMRC five times a year: four quarterly updates and one 'final declaration'. Making Tax Digital for Income Tax from April 2026 requires rental property owners and sole traders to make quarterly submissions of income and expenditure if their turnover was at least £50,000 during the year ended 5 April 2025.
You do not need to make accounting adjustments or tax calculations for these quarterly updates; you are just showing HMRC the raw numbers. The Final Declaration is where you finalise your tax position, submitted by 31 January after the tax year ends; this is where you make any accounting adjustments, claim personal tax reliefs, and confirm your final data is complete.
Stricter Penalties from April 2026
From April 2026, HMRC will begin introducing a penalty points system for late submissions; instead of issuing a fine immediately after a missed deadline, taxpayers will accumulate penalty points each time they submit late. Late tax payment penalties will be 3% when tax is overdue by 15 days, an additional 3% when overdue by 30 days, and 10% per annum charge accruing daily on amounts outstanding after 31 days.
For Self-Employed Expats and Property-Owning Residents
If you're self-employed or let UK property and earned over £50,000 in the past year, you now need HMRC-recognised accounting software to track income and expenses digitally and submit updates every quarter. This replaces the familiar annual tax return deadline (31 January). The new points-based penalty system is designed to be fairer, but filing late still carries financial consequences. Set up digital records now and budget time for quarterly submissions.
Sources
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