Your First MTD Year: A Record-Keeping Checklist for 2026–27
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If you’re a UK sole trader or landlord newly mandated into Making Tax Digital for Income Tax from April 2026, the first year is the one that sets the pattern for every year after it. This MTD checklist covers everything in order — from confirming you’re actually in scope through to using this year’s built-in leniency properly instead of wasting it.
Disclaimer: This article provides general information only and does not constitute tax advice. Consult a qualified tax adviser or accountant for advice specific to your circumstances.
1. Confirm you’re actually in scope
MTD for Income Tax applies based on qualifying income — your combined gross self-employment turnover and gross property income, before expenses, not your profit. Over £50,000 in the 2024–25 tax year puts you in the April 2026 wave; over £30,000 in 2025–26 brings you in from April 2027; over £20,000 in 2026–27 brings you in from April 2028. If you’re not certain your numbers clear a threshold, run them through our free MTD threshold checker — it tells you which wave applies and what your first deadline would be.
2. Sign up
Signing up requires two things: being registered for Self Assessment, and having submitted a return within the last two years. Sign-up happens either directly through HMRC or via compatible software. Gov.uk’s advice for the April 2026 wave is to sign up now rather than wait — there’s no documented standalone fine for signing up late (penalties attach to missed submissions and payments, not the sign-up step itself), but delaying it just compresses the time you have left to get your first quarterly update in accurately.
3. Choose your stack
HMRC explicitly supports splitting this into two layers rather than needing one all-in-one product: dedicated record-keeping software — or even a properly-linked spreadsheet — for your day-to-day records, plus separate filing or bridging software, or an accountant, that actually submits to HMRC, connected by digital links. Neither layer has to do the other’s job. See MTD software vs receipt apps for how the two pieces divide up the work, and do I need an accountant for MTD if you’re weighing DIY filing against handing quarterly submissions to a professional.
4. Capture expenses digitally as they happen
This is the habit that makes or breaks the whole system. A quarterly update only asks for category totals — HMRC never sees your individual receipts — so the entire job during the year is filing each transaction under the right category the moment it happens, rather than reconstructing three months of spending from memory the night before a deadline. See what actually goes in a quarterly update for exactly what those totals need to cover.
5. Know your four deadlines
Quarterly updates are due 7 August, 7 November, 7 February and 7 May, each one a cumulative total from 6 April rather than a standalone quarter — so a figure you get slightly wrong in one update generally corrects itself in the next rather than needing a formal amendment. After the fourth update, you finalise everything through your tax return by 31 January, same as always. The full calendar, including the optional calendar-quarter election, is in MTD quarterly update deadlines.
6. Use the first-year waiver as breathing room, not an excuse
2026–27 is the one year where a late quarterly update doesn’t cost you a penalty point — a genuine, gov.uk-confirmed concession for anyone mandated in from April 2026. But it’s narrow: your tax return and any tax payment are still fully penalised if they’re late, on the same terms as any other year. The full mechanics are in MTD penalty points explained, and if you’re already behind on a quarterly update, here’s exactly what to do about it — it’s more recoverable than it feels. Treat this year’s leniency as room to build the habit properly, not as permission to leave everything until January.
Timing: don’t wait for a deadline to start
None of this needs to happen in a single afternoon, but it shouldn’t wait for a deadline either. Confirming scope and signing up are one-off tasks best handled in the first month of the tax year, not the week before 7 August. Choosing your stack takes an afternoon of comparison, done once. The only step with no natural finish line is capturing expenses digitally — that one runs for the whole year, which is exactly why it’s worth automating from day one rather than leaving to memory in month eleven.
The checklist, all in one place
- Check your combined qualifying income against the £50k / £30k / £20k thresholds
- Sign up for MTD for Income Tax (Self Assessment registration + a return filed in the last 2 years)
- Pick a records layer plus a filing-software-or-accountant combo — you don’t need one product to do both
- Start capturing every expense digitally, categorised, on the day it happens
- Calendar all five deadlines: four quarterly updates plus 31 January
- Use year one’s leniency to build the habit — not to coast, since your return and any payment are still on the hook
Where Taxr fits
Taxr handles step 4 — the daily habit that the other five steps depend on. Photograph a receipt and the AI extracts the vendor, date, total and VAT, then files it under a tax-aligned category automatically. Export clean Excel or PDF summaries whenever a deadline approaches, whether that’s for your own filing software or for an accountant — and if you’re working with one, they can pull your records directly through the free accountant portal. It’s free to start, with 10 scans on the house before Premium kicks in at $2.99/month or $29.99/year (USD).
Download Taxr free — 10 scans on us and start your first MTD year with records already in order.