Making Tax Digital for Income Tax Starts April 2026: What UK Freelancers Need to Have Ready

From 6 April 2026, HMRC stops accepting one annual Self Assessment return from a large group of UK sole traders and landlords. In its place: digital record-keeping all year round, plus a quarterly update sent to HMRC every three months. This is Making Tax Digital for Income Tax, and it is not a proposal or a pilot. It is a mandatory switch for anyone over the qualifying income threshold, and the date is fixed.

Around 780,000 people fall into this first wave. If you are self-employed or you rent out property in the UK, the question worth answering now is simple: does this apply to you, and if it does, what do you need to have in place before April.

Who is affected first

The threshold is qualifying income of more than 50,000 pounds a year from self-employment and/or property, combined, before expenses. That figure is based on your 2024-25 tax year gross income, the return you already filed or are about to file. There is no separate registration test to guess at. You check last year’s number against the line.

Two sole trader businesses or a sole trader with rental income both count toward the same total. A freelancer earning 35,000 pounds from client work and 20,000 pounds from a rental property is over the line even though neither income source alone would trigger it.

The threshold keeps dropping

April 2026 is only the first phase. HMRC has already set the schedule for who joins next, and it brings in roughly 970,000 more people over the following two years.

Effective from	Qualifying income threshold	Estimated people newly affected
April 2026	Over 50,000 pounds	Around 780,000
April 2027	Over 30,000 pounds	Part of the 970,000 second wave
April 2028	Over 20,000 pounds	Part of the 970,000 second wave

If your income sits under 50,000 pounds today but is anywhere near 30,000 or 20,000 pounds, this is not a future problem to ignore. The line is coming toward you on a fixed schedule.

One annual return becomes five submissions

Self Assessment today asks for one filing a year, due by the following January. Making Tax Digital for Income Tax replaces that with four quarterly updates covering your income and expenses, followed by a final declaration once the tax year closes. Same underlying tax, more frequent reporting.

That shift is the part that changes daily habits. A once-a-year return tolerates a shoebox of receipts and a weekend of reconstruction in January. A quarterly update does not. HMRC expects the records behind each submission to already be digital, and expects you to be able to produce the next one every three months without starting from scratch.

What counts as an acceptable digital record

MTD-compatible software has to hold your income and expense records and be able to send updates directly to HMRC. HMRC does not provide this software itself, it only sets the requirement and approves third-party tools that meet it. For a freelancer or landlord, the bulk of what goes into a quarterly update is invoices sent, payments received, and the dates both happened.

That is the exact shape of a record most people who invoice clients already half-keep, scattered across email threads, bank statements, and the occasional spreadsheet. The difference MTD asks for is that it needs to be current and complete every quarter, not reconstructed once a year when the accountant asks for it.

Start the habit before the deadline forces it

If your 2024-25 gross income put you over 50,000 pounds, you have until April to move from annual to quarterly record-keeping, and the smoothest way to get there is to already be tracking every invoice and payment as it happens rather than trying to rebuild a year of it in March.

A dated BillyPaid statement of account gives you exactly that: every invoice, payment, and outstanding balance for a client rolled up for a chosen period, ready whenever a quarter closes rather than reconstructed from scratch each time HMRC asks for one.