Making Tax Digital Hub

MTD for Income Tax applies from 6 April 2026 to self-employed individuals and landlords whose gross qualifying income was above £50,000 in the 2024-25 tax year — this is based on your 2024-25 tax return, not what you earn now. From 6 April 2027 it applies to income above £30,000 in 2025-26, and from 6 April 2028 to income above £20,000 in 2026-27. If you are above the threshold for the assessment year you must use MTD-compatible software and submit quarterly updates. HMRC's guidance puts the three tiers as qualifying income over "£50,000 for the 2024 to 2025 tax year", "£30,000 for the 2025 to 2026 tax year, you will need to use it from 6 April 2027" and "£20,000 for the 2026 to 2027 tax year, you will need to use it from 6 April 2028". Source: HMRC — find out if and when you need to use Making Tax Digital for Income Tax.

The MTD threshold is based on gross income from self-employment, UK property, and foreign property combined. It excludes employment income, dividends, savings interest, and pension income — those sources do not count toward the £50,000, £30,000 or £20,000 threshold. HMRC's guidance defines qualifying income as "your total income from self-employment and property", "the amount before expenses (also known as turnover)", and says "all other sources of income do not count towards your qualifying income", listing employment (PAYE), partnership profit shares, dividends and pensions; the £20,000 tier is HMRC's "£20,000 for the 2026 to 2027 tax year, you will need to use it from 6 April 2028". Source: HMRC — work out your qualifying income and HMRC — find out if and when you need to use Making Tax Digital for Income Tax.

No. Employment income is not included when calculating whether you meet the MTD threshold. Only gross income from self-employment, UK property, and foreign property counts. So if your 2024-25 return showed £40,000 from employment and £15,000 from a rental property, you are below the £50,000 threshold for 2024-25 and are not mandated from 6 April 2026.

You must keep digital records of all rental income received and allowable expenses incurred for each property. This means tracking rent payments, mortgage interest, repairs, insurance, letting agent fees, and any other deductible costs in a digital format.

Yes — spreadsheets do qualify as digital records, provided they are digitally linked to MTD-compatible bridging software that handles the actual submission to HMRC. The key requirement is that data flows digitally from your records to HMRC without manual re-keying at any stage.

You submit four quarterly updates per tax year (roughly every three months), covering income and expenses for that quarter. At the end of the tax year you submit a Final Declaration — this replaces the traditional Self Assessment return and covers all your income sources for the year.

The Final Declaration is the year-end submission that replaces the old Self Assessment tax return under MTD. It is due by 31 January following the end of the tax year (the same deadline as the current SA return). It covers all your income sources — not just property — and allows you to make any final adjustments before HMRC calculates your tax bill.

No. You submit summary totals — total income and total expenses for the quarter — not individual transactions. HMRC does not see your bank statements or receipts. Your quarterly update is a cumulative summary, and your MTD software (like #MTDone!) calculates these totals from your records.

You need HMRC-recognised MTD-compatible software. #MTDone! is listed on HMRC's Making Tax Digital for Income Tax software list and connects to HMRC via their official APIs, allowing you to keep digital records, categorise transactions, and submit quarterly updates directly to HMRC — without needing a separate bridging product.

HMRC uses a points-based system for late submissions, and the threshold depends on whether you are required to use Making Tax Digital for Income Tax or are volunteering ahead of mandation. If you are required to use it, each missed quarterly update or Final Declaration earns one penalty point and the threshold is 4 points. While you are volunteering, HMRC issues no penalty points for missed quarterly update deadlines at all — only for tax returns you submit late — and the threshold is 2 points, rising to 4 from the 2027 to 2028 tax year if you are later required to use MTD. Reaching your threshold charges a £200 financial penalty either way. Every further missed submission while at the threshold costs an additional £200. Below the threshold, points expire automatically 24 months after being awarded; at the threshold, resetting to zero needs a clean run of on-time submissions — 12 months of them if you are required to use MTD, your next 2 tax returns while volunteering — plus filing any outstanding submissions from the previous 24 months. Late payment of tax is a separate penalty: 3% of the tax outstanding at day 15, a further 3% at day 30, then 10% per annum ongoing (rates from 1 April 2025; each 3% charge becomes 4% from 2027–28). In your first year of the new penalties you get 30 days from the due date before penalties start rather than 15, and no penalty at all for paying 16–30 days late — “your first year” means your own first year in the regime, so it depends on when you joined rather than on a fixed tax year, and HMRC gives you that 30-day window once per taxpayer, not once per cohort: if you volunteered before you were required to join, that earlier year was already your first year and you now have only 15 days — HMRC: "You will only receive the 30-day period once — if you have volunteered and are now required to use Making Tax Digital for Income Tax, you will continue to have 15 days". Separately, HMRC's guidance Penalties for Making Tax Digital for Income Tax (gov.uk) states that there are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year — the first year of MTD — giving landlords a grace period on quarterly updates while they adjust. Source: HMRC — penalties for Making Tax Digital for Income Tax.

HMRC's guidance Penalties for Making Tax Digital for Income Tax (gov.uk) states that there are no penalties for missing a quarterly update deadline for the 2026 to 2027 tax year, so HMRC will not issue penalty points for missed quarterly updates during 2026–27. That guidance is written for people required to use MTD from April 2026. You still need to register for MTD and submit, but a late or missed quarterly update in that first year will not count toward your points total.

If you own a property jointly, you report only your share of the income and expenses. Each owner is assessed independently against the MTD threshold based on their own gross income. So if you own a property 50/50 and your half of the rental income is £30,000, that is the figure used when assessing whether you need to comply.

No. MTD for Income Tax Self Assessment applies to individuals — not limited companies. Companies pay Corporation Tax and file accounts with Companies House and HMRC under a separate regime. If you own property through a limited company, MTD for ITSA does not apply to that company.

Bank feed integration via Open Banking is coming soon — see our pricing page for what's planned. Today, #MTDone! lets you import and categorise your rental income and expenses, then generates your quarterly update for review. When you're ready, you submit directly to HMRC from within the app in under a minute.

Bridging software connects existing digital records (like spreadsheets) to HMRC — it handles only the submission, not the record-keeping. Full record-keeping software like #MTDone! manages everything: digital records, transaction categorisation, and HMRC submissions in one place. Bridging is cheaper but means maintaining separate spreadsheets with digital links. Full software is simpler day-to-day as everything lives in one system.

Quarterly updates are cumulative, so any corrections are automatically picked up in your next submission. If you submitted £5,000 income in Q1 but it should have been £4,500, your Q2 update will include the corrected year-to-date figure. There is no need to amend a previous quarter separately — the system self-corrects as you go.

Absolutely. #MTDone! works alongside your accountant. You handle the day-to-day record-keeping and quarterly submissions, while your accountant advises on tax planning and reviews your Final Declaration. #MTDone! reduces the routine work your accountant needs to do, which can lower your accountancy fees.

You register through your HMRC online account (Government Gateway). Go to your Business Tax Account, select 'Making Tax Digital for Income Tax', and follow the sign-up steps. You will need your National Insurance number and UTR (Unique Taxpayer Reference). Once registered, you can connect your MTD software — like #MTDone! — to submit quarterly updates.

The furnished holiday lettings (FHL) tax regime was abolished from April 2025. Previously, FHLs had special tax advantages including capital allowances and mortgage interest relief. From the 2025-26 tax year onwards, holiday lets are treated as standard rental income for tax purposes, including for MTD. If you have holiday lets, they now count toward your gross property income for the MTD threshold. Read the full FHL tax changes guide

The standard quarterly periods and deadlines for MTD are: Q1 (6 April – 5 July) due 7 August; Q2 (6 July – 5 October) due 7 November; Q3 (6 October – 5 January) due 7 February; Q4 (6 January – 5 April) due 7 May. The Final Declaration is due by 31 January following the end of the tax year. You can also elect to use calendar quarter periods instead (e.g. April–June, July–September) — this changes which months each update covers, but the deadlines are the same four dates as the standard quarters (7 August, 7 November, 7 February, 7 May), not the 7th of the month immediately after the calendar quarter itself ends.

Usually yes. Foreign property income counts towards your qualifying income in the same way UK property does, so a UK-resident landlord above the threshold is mandated from April 2026 like anyone else. The one-year exemption for the 2026-27 tax year applies only if your 2024-25 Self Assessment return included the SA109 (residence) or SA107 (trusts and estates) supplementary pages, or you claimed averaging relief (as a farmer, market gardener or creator of literary or artistic works) or qualifying care relief — having foreign property income by itself does not qualify you for it. If you are not UK resident, you only need to follow MTD for Income Tax for your UK self-employment and property income; foreign property income you have not declared on a UK Self Assessment return does not count towards your qualifying income. Source: HMRC — work out your qualifying income and HMRC — find out if you can get an exemption from Making Tax Digital for Income Tax and HMRC — find out if and when you need to use Making Tax Digital for Income Tax.

All of your foreign properties, in any country, are legally treated as one 'foreign property business', separate from your UK property business — losses on one cannot be set against profits on the other. You keep a digital record for each individual foreign property, and your software adds them together into one quarterly update for the foreign business. From the 2026-27 tax year, each foreign property is also registered with HMRC by name and country to get a property ID, used alongside your business ID when you submit. The £90,000 turnover threshold that decides when UK property records must be categorised in full does not apply to foreign property income at all. Read the full foreign property guide Source: HMRC — create digital records and HMRC — PIM4702, overseas property businesses.

You can usually claim Foreign Tax Credit Relief (FTCR) when you report your overseas income on your tax return, so you are not simply taxed twice. You choose between claiming a credit for the foreign tax paid or deducting it as an expense, whichever suits you — the credit is capped at the lower of the foreign tax paid and the UK tax due on that income, and a double taxation agreement may restrict it further. You may not get back the full amount of foreign tax you paid. Where you have more than one foreign property, a separate calculation is needed for each one. Source: HMRC — tax on foreign income: if you're taxed twice and HMRC — HS263, calculating Foreign Tax Credit Relief on income.

Pounds sterling. HMRC's guidance for the foreign pages of the Self Assessment return says to convert the income into UK pounds using the exchange rate at the time the income arose. Source: HMRC — Foreign notes (2026), Self Assessment SA106.