How does Making Tax Digital affect self-employed people?
Answered 11 March 2026
Based on the sources gathered, here is a comprehensive answer on how Making Tax Digital (MTD) affects self-employed people:
Making Tax Digital (MTD) for Income Tax: Impact on Self-Employed People
What the law says
The Income Tax (Digital Requirements) Regulations 2021 (as amended in 2024) set out the core legal obligations. They come into force on 6 April 2026.
Who must comply ("relevant persons"): A "relevant person" is someone to whom Schedule A1 of the Taxes Management Act 1970 applies, other than those who qualify for an exemption.
Income exemptions (who is excluded): The digital requirements do not apply if a person's qualifying income falls below the following thresholds:
- For 2026–27: qualifying income for 2024–25 must be no more than £50,000
- For subsequent tax years: qualifying income for the most recent relevant tax year must be no more than £30,000
"Qualifying income" is the sum of income from each business carried on by the person, as included in their Self Assessment return — before deductions (or after deductions if the gross figure is not required to be reported). Qualifying care receipts are excluded from this calculation.
Core legal obligations for those who must comply:
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Digital records: A relevant person must keep digital records for each business from the digital start date until the business ceases. Records must be entered no later than the quarterly deadline for the relevant quarterly update period.
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Digital records must include: details of financial information, the items comprising that information, amounts and dates received or incurred, and any other information specified by HMRC.
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Quarterly updates: A relevant person must provide HMRC with update information (summary income and expenses) for each business in respect of each quarterly update period for each tax year.
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Functional compatible software: All of the above — record-keeping, preservation of records, quarterly updates, and corrections — must be done using functional compatible software.
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Digital start date: The digital start date for a business is 6 April in the tax year following the year in which the person was required to deliver a Self Assessment return.
HMRC guidance / practice
Background and policy intent: MTD was announced in the March 2015 Budget as a vision for modernising the tax system to make it easier for individuals and businesses to get their tax right — as an alternative to the traditional Self Assessment tax return.
What self-employed people must do in practice: Legislation requires:
- Digital record keeping
- At least 3-monthly updates of summary income and expenses
- An annual declaration
...for most self-employed businesses and landlords.
Taxpayers must use third-party software to keep business records digitally and to submit business updates.
The annual declaration must be submitted at the earliest of 31 January or 10 months after the end of the accounting period. Tax payment on account processes and timing remain unchanged.
Using an agent: If a self-employed person uses a tax agent, the agent can (once authorised):
- Sign the taxpayer up for MTD for Income Tax
- Create, store and correct digital records of self-employment income and expenses
- Send quarterly updates to HMRC
- Submit the tax return and pay tax due by 31 January the following year
However, an agent can only sign a client up if the client has already registered for Self Assessment and submitted a tax return.
Help available: HMRC provides a step-by-step guide for agents and a dedicated HMRC Self Assessment online services helpline for MTD for Income Tax queries.
Citation sources
If you need help, you can: follow the Making Tax Digital for Income Tax as an agent: step by step call the HMRC Self Assessment online services helpline for help with Making Tax Digital for Income Tax
and stored information from customers in MTDfB Tax Calculator – the information from the customer’s updates or annual declarations will flow to the Tax Calculator and will be viewable to the customer via the Business Tax Account Customer records and accounting activity will move away from SA onto the Enterprise Tax Management Platform (ETMP) The payment on account process and timing remain unchanged. There have been other digital changes the Agent Services Account is a new HMRC service for tax a
When authorised, your agent can: sign you up for Making Tax Digital for Income Tax create, store and correct digital records of your self-employment and property income and expenses send your quarterly updates to HMRC submit your tax return and pay tax due by 31 January the following year Find out more about Making Tax Digital for Income Tax.
PART 1 General Citation and commencement 1 These Regulations may be cited as the Income Tax (Digital Requirements) Regulations 2021 and come into force on 6th April 2026 . Interpretation 2 In these Regulations— “TMA 1970” means the Taxes Management Act 1970; “Commissioners” means the Commissioners for Her Majesty’s Revenue and Customs; ... “digital records” has the meaning given by regulation 6; “the digital requirements” has the meaning given by regulation 3(1); “digital start date” has the mea
that business. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The digital start date that applies to the business is 6th April in the year of assessment following the year of assessment in which the person was required to deliver the return. PART 2 Digital records Keeping and recording digital records 5 1 A relevant person must keep digital records for each business for the period beginning with the digital st
Your agent can sign you up to some tax services and create an authorisation request. If your agent signs you up for a tax service, sign in to your personal or business tax account to either: check that the service is displayed add the service to your account Your agent can only sign you up to Making Tax Digital for Income Tax if you have registered for Self Assessment and already submitted a tax return. If your agent cannot sign you up for a particular tax service, you need to: Sign up to each t
on ceased to be digitally excluded and to subsequent tax years. PART 8 Other exemptions Income exemption 21 1 The digital requirements do not apply to a person for a tax year to which the exemption in this regulation applies. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The exemption applies— a for the tax year 2026-27, if the amount of the person’s qualifying income for the tax year 2024-25 is not more than £50,000, and b for subsequent tax years, if the amount of the per
In the March 2015 Budget the government announced its vision for modernising the tax system in order to make it easier for individuals and businesses to get their tax right and keep on top of their affairs, meaning an alternative to the Self-Assessment tax return system. Changes were introduced gradually from April 2017 ahead of legislative changes introduced from April 2018 for businesses and landlords with a turnover exceeding the VAT registration threshold and from April 2019 for those with a