MTD for Income Tax: who is in scope, and when
The mandation waves and their thresholds, what quarterly updates mean, and a ten-second check for any client.
Published 24 September 2026 · 6 min read · Figures last checked 23 September 2026 against GOV.UK
Who is mandated, and when
Mandation is phased by qualifying income. Qualifying income means gross income from self-employment and property, added together, before expenses. HMRC decides each wave from the return filed for the year two years earlier.
| Mandated from | Qualifying income over | Decided by the return for | Status |
|---|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 | In force |
| 6 April 2027 | £30,000 | 2025/26 | To come |
| 6 April 2028 | £20,000 | 2026/27 | To come |
Two things catch people out. It is gross income, so a landlord whose rent alone is over the threshold is in, however small the profit. And the sources are combined, so a modest trade plus a modest rental can add up to mandation.
Check a client in ten seconds:
Is my client in scope for MTD for Income Tax?
Three questions, no sign-up. Thresholds as published by HMRC, verified 23 September 2026.
Enter the income figure to see the result.
Guidance only — check GOV.UK or ask your accountant
What it actually requires
Three things, and they are habits rather than a single filing.
- Digital records. Income and expenses kept in software, or in a spreadsheet that links to software, rather than typed up once a year from a carrier bag.
- Quarterly updates. A summary of the period's income and expenses, sent through MTD-compatible software by 7 August, 7 November, 7 February and 7 May. Standard quarters follow the tax year. A calendar-quarter election is available so the updates can follow month ends instead.
- The year-end return. After the fourth update, the year is finalised through software: adjustments, any other income, and the final tax figure.
Penalties
- Late submission is points-based. Each missed deadline earns a point, and at 4 points the client pays a £200 penalty. One missed update is a point, not a fine. Four of them is £200.
- HMRC is not charging penalties for missed quarterly updates in 2026/27. That grace does not extend to the year-end return, and it does not repeat.
- Late payment: 4% of the unpaid tax at day 15, a further 4% at day 30, then 10% a year from day 31.
Software
HMRC recognises MTD-compatible software and publishes a list of it. It does not recommend or approve providers, so no product is "HMRC approved", whatever a sales page says. Choose on how the client already keeps records and on what your practice can support, not on the label.
What to tell clients now
- Check the income. Add self-employment turnover and gross rents on the latest filed return and read it against the table above: the first wave whose threshold it clears is the client's start date. Anyone over £20,000 is in eventually, so it is worth planning for now.
- Choose software. One product per client, MTD-compatible, and something your practice can log into.
- Start digital records a full quarter before the client's start date. The first quarter should not also be the first attempt.
- Consider the calendar-quarter election. If the client's bank statements and bookkeeping already run to month ends, calendar quarters remove a reconciliation step from every update.
Where I fit
For practices, I set up the digital records, prepare the quarterly updates and prepare the year-end return, all inside your software and submitted under your agent authorisation. Here is how that works week to week.