How do I sign up for MTD for Income Tax?

If you’ve been keeping an eye on UK business tax news recently, you probably know there’s a change coming to the way self-employed people and landlords report their income to HMRC. Making Tax Digital (MTD) for Income Tax is on its way, with a phased rollout beginning April 2026 and a test phase already open. 

Whether you’re thinking about signing up for MTD for Income Tax voluntarily or you simply want to understand what the sign-up process involves, this guide covers everything you need to know. You’ll learn who’s eligible to sign up for MTD for Income Tax, what to consider before you commit and how the signup process works.

A quick recap: what is MTD for Income Tax? 

MTD for Income Tax is a new way for self-employed business owners and landlords to keep their records and report their earnings to HMRC.

For many self-employed individuals and landlords, MTD for Income Tax means the eventual end of reporting income annually via the Self Assessment system. Instead, these taxpayers will have to:

• keep records of their business income and expenses in a digital format 
• send quarterly updates of their business income and expenses to HMRC for each income stream (i.e. self-employed business or total property income) 
• finalise their business income annually by submitting a final declaration

The initiative will be introduced in three key phases.

1. From April 2026, MTD for Income Tax will apply to most self-employed individuals and landlords with qualifying income over £50,000.
2. From April 2027, the rules will extend to include most self-employed individuals and landlords with qualifying income over £30,000. 
3. From April 2028, the rules will apply to most self-employed individuals and landlords with qualifying income over £20,000.

To comply with the rules of MTD for Income Tax, self-employed people and landlords must be aware of when they’ll have to start complying with the MTD rules. For example a sole trader with an annual income of £60,000 will need to comply with the MTD rules from 6th April 2026 at the latest. 

If you’re unsure whether the new rules will apply to you, use HMRC’s tool to check if you need to use MTD for Income Tax.

To learn more about the initiative, read our guide on what MTD for Income Tax means for you. 

Signing up for MTD for Income Tax voluntarily: what to know before you commit

The first group of taxpayers isn’t required to sign up for MTD for Income Tax until the spring of 2026. However, HMRC is inviting certain self-employed people and landlords to do so voluntarily.

If you meet all of the following criteria, you’re eligible for voluntary signup. 

• You’re a UK resident with a National Insurance number.
• Your personal details are up to date with HMRC.
• You’ve submitted at least one Self Assessment tax return.
• Your tax records are up to date and you have no outstanding tax liabilities.
• You use an accounting year that runs from either 6th April to 5th April or 1st April to 31st March.

If you’re eligible, you might be thinking about signing up for MTD for Income Tax voluntarily to get ahead of the curve and avoid the stressful scenario of having to sign up at the last minute. 

You might also be eager to have more time to adapt to a new way of keeping your financial records and reporting your income to HMRC. 

Before you begin the process of signing up voluntarily, there are four important points to consider carefully. 

1. You’ll need to tell your accountant. If you work with an accountant, you need to tell them about your intention to sign up for MTD for Income Tax voluntarily so they can continue to support you effectively. Be aware that they may advise you to wait until a later date to sign up. Alternatively, they might ask you to avoid signing up directly so they can do so on your behalf.
2. You won’t be able to change your mind. Once you’ve signed up for Making Tax Digital for Income Tax, you won’t be able to go back to the old system of reporting your income to HMRC. This means you shouldn’t sign up unless you’re comfortable with committing to making quarterly submissions and submitting an annual final declaration under MTD for Income Tax. 
3. You may face a penalty if you fail to follow the rules. For the 2024/25 and 2025/26 tax years, there are no penalties for late or inaccurate quarterly submissions. However, there are still consequences for failing to follow the rules of MTD for Income Tax after signing up. From January 2026 onwards, you could be fined for submitting inaccurate or late final declarations, paying your Income Tax late or failing to keep digital records. You can learn more about MTD penalties on HMRC’s website.
4. You may still need to submit a Self Assessment tax return. This will apply if you haven’t yet filed a tax return before, or if you haven’t filed your return for the most recent tax year. For example, if you sign up for MTD for Income Tax voluntarily in December 2025 and haven’t submitted your 2024/25 tax return, you’ll still need to do so before the 31st January 2026 Self Assessment deadline. 

Get ready to sign up for MTD for Income Tax in five simple steps

If you’re comfortable with committing to the requirements of MTD for Income Tax and your accountant is happy for you to sign up directly, here are the steps you need to take next.

1. Sign up for compatible MTD for Income Tax software, like FreeAgent, if you haven’t done so already.
2. Locate your Government Gateway login details that you’ve previously used to log in to HMRC for Self Assessment, including your user ID and password. 
3. Gather the required information about your self-employment or property income. You’ll find a full list in HMRC’s official guidance. 
4. Be prepared to provide further proof of your identity, either by using a mobile app with your photo ID or by answering security questions based on information HMRC already holds about you.
5. Complete HMRC’s MTD for Income Tax signup process.

An important note! If you have multiple sources of qualifying income (for instance, you are a sole trader and also a landlord, or you have two self-employed businesses), you’ll need to sign up for MTD for all your income sources at the same time, completing a separate application for each one.

FreeAgent’s HMRC-recognised MTD for Income Tax solution is ready to go 

Once they have completed HMRC’s signup process, eligible FreeAgent customers can connect their account to take advantage of our end-to-end MTD for Income Tax solution. 

Our MTD for Income Tax pilot programme is open to sole traders and unincorporated landlords who meet the relevant eligibility criteria from HMRC and FreeAgent. Full details on how to link your FreeAgent account to HMRC are available here.

To find out more about MTD for Income Tax and the wider MTD initiative, check out FreeAgent’s Making Tax Digital hub.