Almost 3 million UK sole traders and landlords will be filing tax updates every quarter by April 2028. HMRC's own estimate puts the first wave, those with qualifying income over £50,000 who joined in April 2026, at about 864,000 people. The next wave starts in five months, and if you earn over £30,000 from self-employment or property, it is probably you.
This is general information, not tax advice. We are not accountants, and we have drawn the details below from published guidance and accountancy bodies because we could not open every official page on the day of writing. Check the dates against HMRC's own guidance, and speak to your accountant, before you act on any of it.
What Making Tax Digital for Income Tax actually changes
Until now, most sole traders and landlords file one Self Assessment return a year. Making Tax Digital for Income Tax replaces that rhythm with five filings: four quarterly updates of income and expenses, then a final declaration after the tax year ends. The records behind those updates have to be kept digitally, and the updates have to be sent through software that works with HMRC. A spreadsheet on its own does not count unless it is linked to compatible software.
HMRC's published guidance describes the whole scheme at gov.uk. The part owners tend to miss is that the quarterly updates are a summary of income and expenses, not a full tax return, but they are still five deadlines a year instead of one.
The dates that decide whether this is you
The rollout is staged by income, and the test is your qualifying income, meaning your combined gross income from self-employment and property before expenses.
- April 2026: qualifying income over £50,000. This is already live.
- April 2027: qualifying income over £30,000.
- April 2028: qualifying income over £20,000.
The point that catches people out is which year is measured. According to accountancy commentary, such as the ACCA's due dates guide, income from all relevant sources is added together, and your 2025/26 figures decide whether you join in April 2027. That tax year ended on 5 April 2026. So for the next wave, the test has already been run. Your income is what it is. The only open question is whether you know your number.
What counts as qualifying income
It is gross income, not profit. If you turn over £34,000 as a self-employed electrician and your profit after costs is £22,000, the figure that matters for the threshold is the £34,000. Property income from lettings is added to self-employment income, so a plumber with a rental flat can cross the line when neither income alone would. PAYE wages and pensions are not part of the test. If you are close to a threshold, ask your accountant to confirm the figure rather than rounding in your favour, because the consequences of getting it wrong are all on your side.
The uncomfortable bit: penalties
Late quarterly updates are not penalised in the first year, 2026/27, as we read the published guidance. From 2027/28 a points system applies: each missed deadline earns a point, and enough points trigger a financial penalty. Several accountancy sources note that the first-year easement may not help those who join for the first time in April 2027 or April 2028, so do not assume you will get a grace period. Late tax returns and late payments are penalised separately.
That is the reason to start early rather than in March 2027. Software has to be chosen, bank feeds connected and a year of habits changed, and a change like that goes badly when it is done in a rush.
Where AI helps, and where it does not
We build AI workflows for small businesses, so here is our honest view. AI is good at the dull part: sorting a pile of receipts, spotting a bill that was paid twice, and drafting a plain-English summary of where your money went each month. It is a sensible way to make sure your records are tidy before they go into your software.
It is not a substitute for HMRC-compatible software, and it is not a tax adviser. Never paste bank details or client data into a tool you have not checked, and always read what it produces. A sum that looks plausible and is wrong is worse than no sum at all. For the regular reading of your own records, a tool like Claude or ChatGPT can do the first pass, and you or your accountant make the call.
A five-step plan before April 2027
- Find your number. Add up your 2025/26 gross income from self-employment and property. If it is over £30,000, you are in the April 2027 wave.
- Check your accountant's plan. Ask whether they will file the quarterly updates for you, and what it costs.
- Pick compatible software. HMRC lists the products that work. Choose one that connects to your bank so entries arrive automatically.
- Run a practice quarter. Keep digital records from now, so the first real update is not your first attempt.
- Put the dates in the diary. Five filings a year is easy to forget until one is late.
The cost of waiting
The first wave was about 864,000 people. HMRC's statistics suggest the number rises to almost 3 million as the thresholds fall. Accountants and software providers are going to get busier as April 2027 approaches, which means the sensible time to arrange help is now. The Mishcon de Reya guide is a good plain-English walk-through of the five filings if you want a second view.
If you want to see how an AI workflow could tidy your records before they reach your software, we offer a free 30 minute AI audit. Which part of this worries you most, the software or the deadlines?
