Making Tax Digital for Income Tax: Your 7 November Update and What's Coming in April 2027

Quick answer: if you're a sole trader or landlord with more than £50,000 of income, your second Making Tax Digital update is due by 7 November 2026. It covers 6 April to 5 October. From April 2027 the threshold drops to £30,000, so many more people will need to join, and the decision is based on the tax return you file by 31 January 2027.

Making Tax Digital (MTD) for Income Tax started on 6 April 2026. It changes how sole traders and landlords keep records and report to HMRC: digital records, short updates every quarter, then a tax return at the end of the year. This guide explains who it applies to, what to send and when, what happens if you're late, and how to get ready if you'll be joining in April 2027.

Who has to use Making Tax Digital

MTD applies to sole traders and landlords whose qualifying income is over the threshold. Qualifying income is your gross income from self-employment and property added together: your total sales and rents before expenses, not your profit.

Joins MTD from	Qualifying income over	Based on your tax return for
6 April 2026	£50,000	2024/25
6 April 2027	£30,000	2025/26 (due 31 January 2027)
6 April 2028	£20,000	2026/27 (due 31 January 2028)

Example: you earn £18,000 from a sole trade and £15,000 in rent from a property. Your qualifying income is £33,000, so if that's on your 2025/26 return, you'll need to use MTD from April 2027, even if your profit is much lower.

What doesn't count:

a salary from a job (PAYE)
pensions, savings interest and dividends, including dividends from your own limited company
your share of partnership profits (partnerships will join later, but no date has been set)

Limited companies aren't affected. MTD for Income Tax is only for individuals.

Some people are exempt automatically. Others can apply for an exemption if they're digitally excluded, for example because of age, disability, where they live or their religious beliefs, and they can't reasonably use software.

Quarterly updates: what to send and when

A quarterly update is a short summary of your income and expenses, sent through MTD-compatible software. It's not a tax return, and HMRC doesn't see your individual receipts or invoices, only the totals for each category.

Each update is cumulative: it covers everything from 6 April to the end of that quarter.

Update covers	Deadline
6 April to 5 July 2026	7 August 2026
6 April to 5 October 2026	7 November 2026
6 April 2026 to 5 January 2027	7 February 2027
6 April 2026 to 5 April 2027	7 May 2027

If your accounts run to 31 March, you can choose calendar quarters instead (1 April to 30 June, and so on). The deadlines stay the same. You have to choose before your first update, and you can't change for the rest of that tax year.

The 7 November update in practice:

make sure every sale, rent payment and expense up to 5 October is in your software
correct anything you got wrong in the August update. Because updates are cumulative, the correction is picked up in this one
send an update even if you had no income or expenses in the quarter
you can send it from the day after the quarter ends, 6 October

After each update, your software shows an estimate of your tax bill so far, which helps you plan for the January payment.

The tax return still happens. After the fourth update, you add any adjustments and allowances and submit your tax return through the same software. For 2026/27 that's due by 31 January 2028, the usual Self Assessment deadline, and the tax payment dates don't change.

What happens if you're late

MTD comes with a new points-based penalty system.

Late quarterly updates in 2026/27: no penalty points this year. HMRC is giving everyone a year to get used to the system, but you should still send every update.
From 2027/28: each missed deadline earns 1 point. At 4 points you get a £200 penalty, and another £200 for each later miss.
Late tax returns earn points from the start, including the 2026/27 return.
Points expire after 24 months if you're below the threshold. Once you reach 4, you need 12 months of on-time filing before they're wiped.

Late payment penalties have changed too. In the first year, there's no penalty if you pay within 30 days of the due date (after that, 15 days). Pay later than that and a percentage penalty applies, plus interest.

Software

You'll need MTD-compatible software that keeps digital records and sends updates to HMRC. HMRC publishes a list of compatible software, including some free options for simpler businesses. Spreadsheets can still be used if they're linked to "bridging" software that sends the figures to HMRC.

Choose software that suits how you work: an app that photographs receipts, bank feeds that pull in transactions, or something your accountant can access too.

Joining in April 2027? Get ready now

If your 2025/26 qualifying income is over £30,000, you'll need to start MTD on 6 April 2027. HMRC uses the return you file by 31 January 2027 to decide, so filing early gives you more time to prepare.

Work out your qualifying income for 2025/26: total sales plus total rents, before expenses.
Choose software and, ideally, start using it a few months early so it's routine by April.
Open a separate bank account for the business or property if you don't have one. It makes digital records far easier.
Sign up (or let your accountant sign you up) before your first update is due.
Diary the deadlines: 7 August, 7 November, 7 February and 7 May, plus 31 January for the tax return.

Frequently asked questions

When is the next Making Tax Digital deadline?

The second quarterly update for 2026/27 is due by 7 November 2026. It covers income and expenses from 6 April to 5 October 2026. The next one is due by 7 February 2027.

Do I have to use Making Tax Digital from April 2027?

Yes, if you're a sole trader or landlord and your combined gross income from self-employment and property was over £30,000 on your 2025/26 tax return. The threshold drops again to £20,000 from April 2028.

Is qualifying income my profit or my turnover?

Your turnover. It's your total sales and rental income before expenses, added together. Salary, pensions, savings, dividends and partnership income don't count.

Will I get a penalty for a late quarterly update in 2026/27?

No. There are no penalty points for late quarterly updates in the first year. Points do apply to late tax returns, and quarterly updates count from 2027/28.

Do I still need to file a tax return under Making Tax Digital?

Yes. You still submit a tax return at the end of the year, through your MTD software, by 31 January. The quarterly updates don't replace it, and the tax payment dates stay the same.

Does Making Tax Digital apply to limited companies?

No. MTD for Income Tax is for individuals who are sole traders or landlords. Dividends and salary from your own company don't count towards the threshold.

In short

If your qualifying income is over £50,000, your next update is due by 7 November 2026.
Over £30,000 on your 2025/26 return? You'll join on 6 April 2027, so choose software and start getting ready now.
Quarterly updates are short summaries. The tax return and the 31 January deadline still apply.

Not sure whether MTD affects you? Our guide to sole trader vs limited company covers the wider choice of how to run your business.

Need help with Making Tax Digital? Meridian Accountants, Chartered Accountants based in Southampton, works with sole traders and landlords across Southampton, Romsey, Winchester, the New Forest, Totton and surrounding areas. We can check whether MTD applies to you, set up your software and send your quarterly updates for you. Get in touch to book a call.

This article is general information based on HMRC guidance for the 2026/27 tax year as at October 2026. It is not advice on your specific circumstances. Please speak to an accountant before acting.