For twenty-odd years, self-employment tax in this country worked one way: keep your receipts somewhere, and once a year sit down in January and turn them into a Self Assessment return.
That has now started to change, and the change is bigger than the branding suggests. Making Tax Digital for Income Tax replaces the annual reckoning with a rhythm of quarterly submissions, and it requires the records behind them to be kept digitally.
Who it applies to, and when
It arrives in stages, by income.
From April 2026, if your qualifying income was over £50,000, you are in it. That is now, and the first cohort is partway through its first year.
From April 2027, the threshold drops to £30,000. From April 2028, to £20,000. Each stage brings in a much larger group of people than the one before, and the £20,000 stage catches a great many part-time landlords and side businesses.
The word doing the work is qualifying income, and it is widely misread. It means your gross income from self-employment and property, added together, before expenses. Not profit. A landlord with £28,000 of rent and a small consultancy turning over £25,000 has £53,000 of qualifying income and is in scope now, even if the profit after mortgage interest and costs is modest.
Two properties held jointly count at your share. Employment income and dividends do not count towards the threshold, though they still go on your return as usual.
HMRC works out whether you are in scope from your last submitted return, so the 2024-25 return determined the April 2026 intake. If you were caught by it you should have been told.
What quarterly actually means
This is where most of the anxiety is, and most of it is misplaced.
A quarterly update is not a tax return. It is not a calculation, it does not involve claiming reliefs, and nothing is due to be paid on the back of it. It is a summary of income and expenses by category for the quarter, sent from compatible software.
The standard quarters end on 5 July, 5 October, 5 January and 5 April, and each update is due roughly a month later — 7 August, 7 November, 7 February and 7 May. You can elect for quarters aligned to calendar months instead, which is easier if your bookkeeping already works that way.
Then, after the year ends, there is a final declaration by 31 January. That is the one that resembles the old return: it pulls the quarters together, adds anything else (employment, dividends, savings), applies your reliefs, and produces the actual tax figure. The payment dates are unchanged.
So the year goes from one deadline to five. But four of the five are light, and none of them asks you for money.
The part people underestimate
The genuine change is not the submissions. It is the requirement to keep digital records.
Under MTD you need each transaction recorded digitally, in software, with a digital link running through to what you submit. A shoebox of receipts reconciled every January does not satisfy it. Nor does a spreadsheet that you retype into something else, unless the link between them is itself digital.
This is the bit that quietly ends the traditional way of doing it. Not the frequency. The record keeping.
Which is also why the sensible response to a quarterly deadline is not to do three months of bookkeeping in the last week of it. If you capture things as they happen, the update is a few minutes' work. If you do not, you have created four Januarys.
What to do about it now
Work out your qualifying income on gross figures, and check which year you are caught in. Under £20,000 and you are outside the scheme as currently announced, though I would not build a decade around that.
Then get the record keeping in place before the deadline that needs it, and separate the two jobs in your head. Keeping records digitally is something you can start today. Submitting to HMRC requires software that HMRC recognises for MTD, and that is a specific list.
That distinction matters and it is worth being plain about it: my app is a record keeper, not a submission tool. It tracks income and expenses, scans receipts, categorises them, keeps a running estimate of income tax and Class 2 and 4 National Insurance so the bill is not a surprise, and holds the quarterly deadlines in a calendar. Filing the quarterly updates themselves needs HMRC-recognised software, or an accountant who has it.
Also worth knowing: penalties under MTD use points rather than automatic fines. A missed deadline earns a point, and the financial penalty arrives once you accumulate enough of them. It is more forgiving of one bad quarter than the old regime, and less forgiving of a habit.
Where the app comes in
UK Landlords & Sole Traders came out of my own property bookkeeping and the discovery that most of the alternatives wanted my bank feed, my receipts and my tax position on somebody else's server.
Everything it holds stays on the device, behind Face ID. Receipts are scanned and read on the phone. Income and expenses are categorised into the headings the quarterly updates use, and it tracks properties separately so a portfolio does not become one undifferentiated pile.
Dates, thresholds and penalty rules all change. Check the current position on gov.uk, and if your affairs are at all complicated, an accountant is cheaper than getting this wrong.