Making Tax Digital: what it means for self-employed gas engineers

Making Tax Digital for Income Tax means keeping digital records and sending HMRC four quarterly updates a year, then a final declaration, instead of one annual return. It started in April 2026 for sole traders and landlords with over £50,000 of gross income, extends to £30,000 in April 2027 and £20,000 in April 2028. For the first group, the first quarterly deadline is 7 August 2026.

Who it applies to, and when

• From April 2026: self-employed people and landlords with more than £50,000 of qualifying income.
• From April 2027: those over £30,000.
• From April 2028: those over £20,000.

The threshold is measured on your gross income (your total turnover from self-employment plus any property income, before expenses) from the previous tax year, not your profit. That catches out a lot of people who assume it's based on what they take home.

What you actually have to do

Three things change. You keep your records digitally in software that works with MTD; you send HMRC a short update each quarter with your income and expense totals; and after the year end you make a final declaration to confirm the figures and settle up, in place of the old Self Assessment return. The quarterly deadlines are 7 August, 7 November, 7 February and 7 May.

The first year is a soft landing

There's a genuine deadline of 7 August 2026 for the first quarter, but HMRC has said it won't charge penalty points for late quarterly updates in the first year, 2026/27. So it's real and worth getting set up for, but you won't be punished for stumbling while you find your feet. After that, late submissions build up points, with a £200 charge once you hit four.