MAKING TAX DIGITAL GUIDE

How to sign up for Making Tax Digital with HMRC.

Sole traders and landlords over the income threshold now have to keep digital records and send quarterly updates to HMRC. This guide explains who needs to sign up, what to have ready, the steps in the HMRC service, and what changes once you are in.

Figures for the 2026/27 tax year · Last reviewed 21/10/2026

Which Making Tax Digital are you signing up for?

Making Tax Digital covers two taxes, and they work differently.

Making Tax Digital for VAT. HMRC says VAT registered businesses are already signed up, and that you no longer need to sign up yourself. If you are VAT registered, your job is to keep digital records and file your VAT returns through compatible software.
Making Tax Digital for Income Tax. This is the one most people mean when they ask how to sign up. It applies to sole traders and landlords who are registered for Self Assessment. Most of this guide is about it.

If you are not a sole trader or landlord registered for Self Assessment, you do not need to sign up. Partnerships will need to use it in future, but HMRC has not yet set a timeline for them.

Who has to sign up for Making Tax Digital for Income Tax

Whether you must use it depends on your qualifying income. That is your total income from self-employment and property, before expenses. In other words, it is your turnover and gross rents, not your profit.

HMRC looks at your Self Assessment tax return for a given tax year. If your qualifying income is over the threshold, you must use Making Tax Digital from the April roughly a year after that tax year ends.

Over £50,000 in 2024 to 2025. You should have started using it from 6 April 2026.
Over £30,000 in 2025 to 2026. You will need to use it from 6 April 2027.
Over £20,000 in 2026 to 2027. You will need to use it from 6 April 2028.

If your income is over the threshold, HMRC says it will write to you to confirm when you must start. If no letter arrives, you are still responsible for checking whether and when you need to use it.

What counts towards qualifying income

Qualifying income includes self-employment income and property income, including foreign property income if you are UK tax resident. For jointly owned property, only your share counts. As a hypothetical example, rental income of £40,000 split equally between two owners gives each owner £20,000.

Some income does not count. HMRC lists, among others:

Employment income taxed through PAYE
Your share of partnership profit as an individual partner
Dividends, including dividends from your own company
State Pension and private pensions

So a hypothetical person earning £45,000 in salary and £15,000 in rent has qualifying income of £15,000, not £60,000.

Can you sign up yet?

HMRC has two conditions before you can use the sign-up service:

You must be registered for Self Assessment
You must have submitted a Self Assessment tax return in the last 2 years

If you have only just started trading or letting, register for Self Assessment first. Our guide on how to register as self-employed covers that step.

You can also sign up voluntarily before you have to. HMRC allows you to sign up for the current tax year or the next one. If you join part way through a year, you will need to send any quarterly updates you have already missed for that year.

Check whether you are exempt

Some people do not have to use Making Tax Digital. Being digitally excluded is one reason HMRC gives. HMRC also offers a temporary exemption in some cases. If you are not automatically exempt, you need to apply.

To apply, you call or write to HMRC using the Self Assessment general enquiries contact details. Give your National Insurance number, name, address and the reasons you think you are exempt, with any evidence. Apply before you would need to start. HMRC aims to reply within 28 calendar days.

An exemption does not remove Self Assessment. Exempt people still report their income and gains on a Self Assessment tax return as normal.

What to have ready before you sign up

The sign-up itself is short if you gather the details first.

Your Self Assessment sign-in. You sign in with the same user ID and password you used to register for Self Assessment.
A phone for identity checks. If HMRC asks you to prove who you are, you use an app on your phone with your passport or driving licence details. HMRC has removed the option to prove your identity by answering questions.
Your income sources. Every self-employment and property income source, including any that have stopped since your last tax return.
Start dates. The start date of each business or property income source, if it began within the last 2 tax years.
Sole trader details. Your business name as it appears on your invoices, your business address and the nature of your trade.
Your start year. The tax year you will start using Making Tax Digital.
Compatible software. Check that the software you plan to use works with Making Tax Digital for Income Tax.

How to sign up, step by step

HMRC's sign-up service follows the same order each time.

Step 1: check you need to, or want to. Confirm your qualifying income, and check whether you might be exempt.
Step 2: choose your software. Make sure it is compatible before you sign up, so you are ready to send updates.
Step 3: sign in. Go to the sign-up service on GOV.UK and sign in with your Self Assessment user ID and password.
Step 4: prove your identity if asked. Use the phone app route with your passport or driving licence details.
Step 5: check your income sources. Give details of each self-employment and property income source, including any that have stopped since your last tax return.
Step 6: confirm your start year. Tell HMRC which tax year you will start using the service.

Once you are signed up, your compatible software is what you use to send quarterly updates and, at the end of the year, your tax return.

What if HMRC signs you up?

HMRC says that from September 2026 it will start signing up people who need to use Making Tax Digital for Income Tax for 2026 to 2027 and have not done it themselves. It uses only the information it already holds about you, which may be out of date.

That means you should still log in and check your details are right. If HMRC has not signed you up, there is still time to sign up yourself or ask an agent to do it.

Signing up through an agent

An accountant or tax agent can sign you up instead. To do it, they need an agent services account, your permission to act for you for Making Tax Digital for Income Tax, and your full name, date of birth and National Insurance number. They also need the same business and income source details listed above.

Existing Self Assessment authorisations are recognised. If one is not showing in the agent's account, they need to add it. Adding it does not sign you up, so the agent still has to complete the sign-up.

What happens after you sign up

From your start year, you keep digital records of your self-employment and property income and expenses. You then send a quarterly update to HMRC through your software. A quarterly update is a summary, not a tax return.

Each update covers the tax year so far, from 6 April to the end of the update period. If your accounting period follows the tax year, you use standard update periods:

6 April to 5 July. Update due by 7 August.
6 April to 5 October. Update due by 7 November.
6 April to 5 January. Update due by 7 February.
6 April to 5 April. Update due by 7 May in the following tax year.

If your accounting period runs from 1 April to 31 March, you use calendar update periods instead, ending on 30 June, 30 September, 31 December and 31 March. The deadlines are the same. You then submit your tax return through your software by 31 January after the tax year ends. For 2026 to 2027, that is 31 January 2028.

Our guides on Making Tax Digital deadlines and what Making Tax Digital means for the self-employed go further.

Penalties in the first year. HMRC will not apply penalty points for late quarterly updates in 2026 to 2027, the first tax year. Penalty points still apply to a late tax return for that year. See our guide to Making Tax Digital penalties.

Choosing software

You need commercial software that works with Making Tax Digital for Income Tax. HMRC does not recommend any product or provider. Some providers offer free versions for simple tax affairs, often with limits such as a cap on transactions.

If you keep records in spreadsheets, bridging software can connect them to HMRC and send your updates. Our guide on using Excel for Making Tax Digital explains how that works. If you already use Xero, QuickBooks, Sage or FreeAgent, check that your plan supports Making Tax Digital for Income Tax.

Keeping your records ready for quarterly updates

Signing up is the easy part. The ongoing work is keeping your records accurate every quarter, not once a year. Four deadlines a year leave less room to sort out missing receipts or uncoded bank lines at the last minute.

Records that are kept up to date during the quarter make each update a short review rather than a scramble. If your books have fallen behind, it is worth bringing them up to date before your first update period ends.