Making Tax Digital for creators: what changes

Making Tax Digital for Income Tax adds ongoing digital reporting for eligible sole traders and landlords; an annual tax return remains required.

From April 2026, anyone with qualifying income over £50,000 (based on figures from an earlier tax year) must keep digital records of income and expenses using compatible software.

You submit cumulative quarterly updates of income and expenses, then an annual tax return to finalise the year.

After the tax year ends, you submit an annual tax return through compatible software, including other income, reliefs and corrections. See HMRC MTD guidance.

From April 2027, the threshold reduces to £30,000 of qualifying income, bringing many more creators into scope.

Qualifying income is based on your gross self-employment and property income combined, not your profit, so creators with high turnover but modest margins can still be caught.

Digital records must be kept using MTD-compatible software; you cannot simply keep a spreadsheet unless it links to HMRC through approved bridging software.

The quarterly updates themselves are relatively light-touch summaries rather than detailed tax calculations, but they still need to be accurate and submitted on time to avoid penalties.

A points-based penalty system applies for late submissions, building up over repeated misses, similar to the system already used for VAT.

Preparing early — moving to proper software and clean digital records well before your threshold year — makes the transition far smoother than switching at the last minute.

If your income fluctuates around the threshold, HMRC uses your qualifying income from an earlier year to decide whether you are brought into MTD, so it is worth tracking your position in advance.

Source: Income Tax rates and allowances (gov.uk) · Self Assessment (gov.uk)