Making Tax Digital

Quick Guide for Freelancers & Self-Employed

What is Making Tax Digital (MTD)?

From April 2026, if you earn £50,000+ from self-employment or rental income, you'll file tax updates every 3 months instead of once a year. From April 2027 this applies to those earning £30,000+.

Here's the thing: You're moving from 1 annual tax return to 5 submissions per year (4 quarterly updates + 1 year-end return). It sounds like a lot, but it's actually spreading the admin out – less stressful than doing it all at once.

Who Needs to Use MTD?

You need MTD if your gross income is £50,000+ from:

Note: This is based on gross income (before expenses), not profit.

What You'll Need to Do

1️⃣ Get Digital Records Software

Choose HMRC-approved software to track income & expenses. Free options are available.

2️⃣ Submit Quarterly Updates

Send your income & expenses every 3 months to HMRC (4 per tax year).

3️⃣ File Year-End Return

Submit your final tax return before 31 January (same as now).

4️⃣ Pay Tax by 31 January

Payment deadline stays the same – just more submissions beforehand.

Software Options

Free options: Sage (limited features), Starling Bank, FreeAgent (with a Mettle Business Account) and others

Paid options: Xero (from £7/month), Untied (£130/year)

Use gov.uk/guidance/find-software-that-works-with-making-tax-digital-for-income-tax to find the right tool for your needs.

Making Tax Digital Quickstart Guide | Maybe Pay Me | June 2026 1
This guide is for informational purposes only and does not constitute financial advice. Always seek professional guidance before making financial decisions — Maybe Pay Me accepts no liability for actions taken based on this content.

Making Tax Digital

Key Dates & Deadlines 📅

Critical Dates for 2026/27

Date What You Need to Do
6 April 2026 Start using MTD software to keep digital records
7 August 2026 1st Quarterly Update (April–July 2026)
7 November 2026 2nd Quarterly Update (April–October 2026)
7 February 2027 3rd Quarterly Update (April 2026–January 2027)
7 May 2027 4th Quarterly Update (full year April 2026–April 2027)
31 January 2028 Submit final tax return + pay your tax bill

Setting Up: Before first submission

✓ Create an HMRC Online Services account (or use your existing one)

✓ Choose & set up your software (allow time to import records)

✓ Set calendar reminders for all quarterly deadlines

✓ Get familiar with your software (practice before your first submission)

Late? Here's What Happens...

Late Quarterly Updates (2026/27)

No penalties for being late with quarterly submissions in year one. However, you can still correct errors before filing your final return.

Late Tax Return or Payment

Good news: You get up to 30 days to pay or arrange a payment plan before penalties kick in (normally 15 days). They're being lenient in year one – use that time to get organised.

Phased Roll-Out

MTD starts with the highest earners. Timeline:

Making Tax Digital Quickstart Guide | Maybe Pay Me | June 2026 2
This guide is for informational purposes only and does not constitute financial advice. Always seek professional guidance before making financial decisions — Maybe Pay Me accepts no liability for actions taken based on this content.

Making Tax Digital

Your Questions Answered

FAQs

Can I opt out or delay?

Generally, no. If you meet the income threshold, you must use MTD. You can opt out if your income drops below the threshold for 3 consecutive years.

Will I pay more tax?

No. MTD doesn't change how much tax you owe – just how often you report it. Payment deadlines stay the same (31 January).

Can I get an exemption?

Only if you're "digitally excluded" (e.g., age, disability, no reliable internet). You must apply to HMRC. Simply preferring paper returns won't qualify.

What if I make a mistake on my quarterly update?

You can correct it in your software before submitting your final tax return. No penalty if you fix it yourself.

Do I need an accountant?

Not necessarily. Many freelancers can manage MTD with the right software. An accountant can help if you find it overwhelming or have complex finances.

What about my childcare allowance?

Changes coming: If you're a childminder using MTD, the old "wear and tear" allowance ends. You'll now claim actual costs and apportion shared expenses.

Can I combine my income streams?

Yes. If you're both self-employed and a landlord, combine gross income. They both count toward the £50,000 threshold.

Need Help?

Quick Checklist

Before your first submission:

Pro tip: Start using your chosen software early. You'll be comfortable with it by April and less likely to miss deadlines. Plus, you'll spot any record-keeping issues before they become problems.

The Bottom Line

MTD means more frequent submissions, but the same final payment deadline. Use the right software, stay organised, and set reminders. Most freelancers find it manageable once they get going. 🎯

Making Tax Digital Quickstart Guide | Maybe Pay Me | June 2026 3
This guide is for informational purposes only and does not constitute financial advice. Always seek professional guidance before making financial decisions — Maybe Pay Me accepts no liability for actions taken based on this content.