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

How did the first quarterly deadline go?

The first Making Tax Digital for Income Tax quarterly update fell due on 7 August 2026, with HMRC putting more than 864,000 sole traders and landlords in scope. It is too early for official figures on how many filed on time, and HMRC had not published them at the time of writing. What was clear going in is that many were not ready: research by Lloyds Banking Group shortly before the deadline found 55 per cent, roughly 475,000 people, had not finished preparing. HMRC called it a landmark moment for the tax system and stressed that, for anyone already keeping digital records, the update takes minutes and is not a tax return. Because the first year has a soft landing, a missed quarterly update carries no penalty points for 2026/27, though that easement does not stretch to the year-end return.

Who has to use Making Tax Digital, and from when?

It arrives in income bands, and the band is measured on gross income, meaning your total turnover from self-employment plus any property income, before expenses, in one set tax year: 2024 to 2025 for the April 2026 start, 2025 to 2026 for April 2027, and 2026 to 2027 for April 2028.

• 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.

Gross, not profit, is the word that catches people out. A busy year on the tools with a lot of materials passing through your books can push turnover past £50,000 even when what you actually took home was nowhere near it. If you invoice for boilers, cylinders and parts as well as labour, check your turnover figure before assuming this isn't you.

What do you actually have to do each quarter?

In place of the old Self Assessment return, 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. The quarterly updates do not replace your tax return: you still make a final declaration after the year end and pay any tax due by the usual 31 January deadline. The quarterly deadlines are 7 August, 7 November, 7 February and 7 May.

The quarterly update is totals, not a full return. That sounds light, and it is, provided the records behind it exist. The engineers who will find MTD painful are the ones typing up a shoebox of receipts the week the update is due. Log invoices and expenses as you go and the quarter itself takes minutes.

How should a gas engineer get set up?

What happens if you're late in the first year?

Not much, by design. HMRC has said it won't charge penalty points for late quarterly updates in the first year, 2026/27, so the 7 August deadline is real but the landing is soft. That easement covers the quarterly updates only. It does not cover your year-end tax return for 2026/27, which is still due by 31 January 2028 and can still be penalised if it is late. After that first year, late submissions build up points, and once you hit four there's a £200 charge. Treat 2026/27 as the practice lap. Get the habit right while the stakes are low, because from year two the points are real.

What if you earn under the threshold?

Nothing is required of you yet, and some people are exempt altogether, for example on digital-exclusion grounds. But the bands keep dropping, £30,000 from April 2027 and £20,000 from April 2028, and because entry is judged on a previous year's gross income, a good run of work now can pull you in later. If you're anywhere near a band, start keeping digital records anyway. It costs you little, and it means the switch, when it comes, is a non-event rather than a scramble.