Does it apply to you?
Enter what you invoice, not what you keep — the threshold is gross income before expenses.
Gross, before any expenses — what you invoice, not what you keep.
Gross rent, again before costs. Leave at zero if none.
Qualifying income £45,000
6 April 2027
you join MTD for Income Tax for 2027/28
4 + 1
quarterly updates, then a final declaration
Not yet
MTD for VAT
31 January
final declaration for 2027/28
Qualifying income is gross self-employment turnover plus gross property income, before expenses — which is why a busy year with thin margins can still put you over. You are not VAT registered, so this would be your first time under MTD. Registering for VAT later brings MTD for VAT with it, whatever your income. Thresholds and dates are HMRC's and can change; check the current guidance before you act on this.
The timetable
MTD for VAT has applied to every VAT-registered business since April 2022. MTD for Income Tax is arriving in three waves.
Live now — the first quarterly update covers 6 April to 5 July 2026.
The band most established sole traders fall into.
Brings in most part-time and side-business trades.
The bit that catches trades out
Qualifying income is turnover, not profit, and it adds self-employment and property income together. Materials, plant hire, subcontractors, fuel and van costs do not come off it.
That matters more in the trades than almost anywhere else, because materials-heavy work carries a lot of turnover for the profit it makes. A roofer invoicing £90,000 with £45,000 going straight back out on materials is nowhere near a £50,000 profit — but is comfortably over the threshold, and was in scope from April 2026.
What you actually have to do
- 1
Keep digital records
Income and expenses captured in software as the work happens, not reconstructed from a carrier bag in January. This is the part that takes real time to change, which is why it is first.
- 2
Send four quarterly updates
Running totals of income and expenses for each quarter. No tax calculation, no payment, nothing final — HMRC just wants the shape of the year as it goes.
- 3
File a final declaration
Replaces the Self Assessment return. Adjustments, reliefs, allowances and anything else get settled here, by 31 January after the tax year ends.
- 4
File through recognised software
Submission has to go through software on HMRC’s recognised list — yours, or your accountant’s. Many trades keep records in one place and file through another.
Quarterly update deadlines
The standard quarters follow the tax year. You can elect to use calendar quarters instead — the deadlines stay the same.
| Quarter | Update due |
|---|---|
| 6 April – 5 July | 7 August |
| 6 July – 5 October | 7 November |
| 6 October – 5 January | 7 February |
| 6 January – 5 April | 7 May |
| Final declaration | 31 January following |
Where Hero365 fits
Hero365 handles the record-keeping half. Quotes, invoices, payments, materials and expenses are captured digitally as the job happens, so the quarter is already added up when the deadline comes round. Hero AI assembles your VAT return into the nine boxes and tells you what it is going to say before you file it.
To be straight about the filing step: Hero365 is not on HMRC's recognised list and does not transmit to HMRC. It prepares the figures and hands them over — you or your accountant submit them through recognised software. If a supplier tells you their app removes the filing step entirely, ask which HMRC list they appear on.
Common questions
What is Making Tax Digital?
Making Tax Digital is HMRC’s programme to move tax record-keeping and filing into software. It means keeping your records digitally rather than on paper or in a shoebox, and sending HMRC updates from that software instead of typing figures into a return once a year. It already covers VAT, and from April 2026 it started applying to income tax for the larger sole traders and landlords.
Who does Making Tax Digital for Income Tax apply to?
Sole traders and landlords, phased in by qualifying income. From 6 April 2026 it applies over £50,000, from 6 April 2027 over £30,000, and from 6 April 2028 over £20,000. Partnerships and limited companies are not in it yet. If you are VAT registered you are already inside MTD for VAT regardless of any of this.
Is the threshold based on profit or turnover?
Turnover, and this is the single most common misunderstanding. Qualifying income is gross self-employment income plus gross property income, before you take off a single expense. A contractor invoicing £70,000 with £30,000 of materials and van costs has £40,000 of profit but £70,000 of qualifying income — over the threshold and in from April 2026.
How often do I have to file under MTD for Income Tax?
Four quarterly updates plus a final declaration, so five submissions a year rather than one. The standard quarters end 5 July, 5 October, 5 January and 5 April, with the updates due on 7 August, 7 November, 7 February and 7 May. The final declaration replaces the Self Assessment return and is due by 31 January after the tax year ends.
Are the quarterly updates a tax bill?
No. They are summary totals of income and expenses for the period — they do not create a payment, and you are not expected to have finalised anything. Adjustments, reliefs and allowances all happen at the final declaration. Payment dates do not change.
Do I need to change software?
You need MTD-compatible software to file, which is a specific thing — it has to submit to HMRC through their API and appear on HMRC’s recognised list. Plenty of businesses run their day-to-day records in one system and file through another, or leave the filing to their accountant. What matters first is that your records are digital and complete, because that is the part that takes months to fix.
What counts as keeping digital records?
Your income and expenses recorded in software as you go, with the digital trail preserved through to what you submit. Photographing receipts into an app counts; retyping a stack of paper into a spreadsheet the night before the deadline is the thing MTD is meant to end. You do not have to throw away paper originals, but the record HMRC cares about is the digital one.
What happens if I miss a quarterly update?
Late submissions run on a points system rather than an immediate fine — you collect a point per missed deadline and a penalty follows once you hit the threshold, with points expiring after a period of compliance. It is more forgiving than the old regime for a single slip and much less forgiving if you are habitually late.
Can I be exempt from Making Tax Digital?
Exemptions exist, mainly for people who are digitally excluded — by age, disability, location or remoteness, or religious grounds — and they have to be applied for rather than assumed. Being below the income threshold is not an exemption, it just means you are not in scope yet.
General guidance for UK tradespeople, not tax advice, and accurate to the announced timetable as at July 2026. Thresholds, dates and exemptions are HMRC's and do change — check current HMRC guidance or ask your accountant before acting on anything here.
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