Making Tax Digital for Income Tax started on 6 April 2026, and the first quarterly update is due by 7 August. HMRC wrote to over 864,000 sole traders and landlords about it, and a fair share of those letters are still sitting unopened behind salon reception desks. If you're self-employed and your turnover is anywhere near £50,000, this applies to you, and the deadline is days away.

Who has to do this

The test is £50,000 of qualifying income in the 2024/25 tax year. Qualifying income means your gross self-employment turnover plus any property income, added together across sources. The figure HMRC tests is what went through the till, before a single cost comes out, and it has nothing to do with profit.

A sole trader salon turning over £80,000 with £24,000 of profit on the year is comfortably in scope. Most people hear £50,000 and think of earnings, which is why so many salon owners have filed this under somebody else's problem. It's the second turnover figure a salon owner needs to watch, alongside the £90,000 VAT threshold, and like the VAT threshold it counts revenue, not what you keep.

Limited companies are outside the scheme for now. Sole traders are in from this year, and partnerships join later, on a date HMRC hasn't yet fixed. Whether you personally are in scope is a question for your accountant, so ask it directly rather than guessing from a blog article, this one included.

What replaces the tax return

Three things: digital records kept as you trade, four quarterly updates sent from software, and a final declaration that pulls the whole year together. The Self Assessment return you know becomes that final declaration, still due by 31 January, sitting on top of the four updates you've already sent during the year.

A quarterly update is lighter than it sounds. It's a summary of income and expenses by category, sent straight from your software, with no tax calculation and no payment attached. The tax is still worked out and paid annually. What changes is that HMRC now expects the records behind that summary to exist all year round, in digital form, rather than being assembled in a panic the following January.

The dates

Quarters end on 5 July, 5 October, 5 January and 5 April, and each update is due by the 7th of the following month. For this first year that means 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027, with the final declaration due by 31 January 2028.

Missing an update earns a penalty point, and enough points earn a £200 fine, the same points system VAT already uses. One late quarter won't ruin you, but the system is built to catch the chronically late rather than the occasionally human.

What counts as a digital record

Every sale and every purchase, categorised, in software that can talk to HMRC. A spreadsheet can still qualify if it connects through bridging software, though the records have to be kept digitally as you go either way. A carrier bag of receipts and a heroic weekend in January no longer clear the bar.

For a salon, the sales side is the easy half, provided your till or booking system records each transaction as it happens and can export the totals. The purchases side, colour orders, sundries, the card machine fees, needs the same treatment, which in practice means accounting software or an accountant who runs it for you.

What this means if you take cash

Card sales leave their own trail. Cash has to be written down on the day it's taken, because a quarterly deadline leaves no room for reconstructing takings from memory three months later. The salons that will struggle with this are the ones used to rebuilding a year from bank statements every January, and the fix is a daily takings figure recorded somewhere digital, ideally rung through a system that stores it against the date.

Chair renters are in scope too

A self-employed stylist renting a chair is a sole trader with her own turnover, and the £50,000 test applies to her exactly as it applies to you. If you rent chairs out, the people working in your salon may have no idea this touches them, and a renter who ignores it collects the penalty points in her own name. Worth a conversation over the colour trolley, and worth understanding how the rental model works financially if you haven't looked at it recently.

If you're under the threshold

The threshold drops to £30,000 from April 2027 and £20,000 from April 2028, so almost every full-time self-employed stylist is in scope within two years. Being under £50,000 today buys you time to get the record-keeping habit in place before the deadline arrives with penalties attached, and that time is easier to use now than next spring.

What to do this week

  • Check your 2024/25 turnover. Pull up the return you filed in January and look at the gross figure, because that's the number HMRC has already tested you against.
  • Ask your accountant two questions. Am I in scope from April 2026, and who is filing the quarterly updates, you or me? Plenty of accountants are quoting a fee per quarter, so find out what yours charges before the invoice tells you.
  • Get the takings out of the notebook. Whichever software ends up doing the filing, it needs clean daily sales records to work from, and July's records are being made right now.

None of this is tax advice, and the scope question genuinely belongs with your accountant. The record-keeping question belongs with you, and of the two it's the easier one to fix.