Making Tax Digital for Income Tax (MTD ITSA) requires UK self-employed individuals and landlords with annual income over £50,000 to keep digital records and submit quarterly updates to HMRC, starting 6 April 2026. The threshold drops to £30,000 from April 2027.
This is the biggest change to UK Self Assessment in 25 years. If you''re affected, you should be preparing now — not in March 2026.
Who''s in scope
| From | Who is in scope |
|---|---|
| 6 April 2026 | Self-employed and landlords with gross qualifying income over £50,000 in the 2024/25 tax year |
| 6 April 2027 | Above + those with gross qualifying income over £30,000 in the 2025/26 tax year |
| Future (to be announced) | Threshold expected to drop further; partnerships likely brought in later |
"Gross qualifying income" is total turnover from self-employment plus gross rental income (before expenses). For someone with £35,000 self-employment turnover and £20,000 rental income, total qualifying income is £55,000 — they''re in from April 2026.
What''s required from 6 April 2026
Once in scope, you must:
- Keep digital records of every business or rental transaction in MTD-compatible software.
- Submit quarterly updates to HMRC — summary totals of income and expenses by tax-relevant category, due 7 days after each quarter-end.
- Submit a year-end finalisation by 31 January following the tax year — this replaces the current Self Assessment return for the categories in scope.
The four quarterly deadlines for a standard tax year:
| Period | Due |
|---|---|
| 6 April – 5 July | 7 August |
| 6 July – 5 October | 7 November |
| 6 October – 5 January | 7 February |
| 6 January – 5 April | 7 May |
You can choose calendar-quarter dates (1 April-30 June etc.) instead, with deadlines shifted accordingly.
Software requirements
You must use HMRC-recognised MTD-compatible software for both record-keeping and submissions. Options:
- All-in-one cloud accounting: Xero, QuickBooks, FreeAgent, Sage Business Cloud, Pandle. Handles records and submissions natively.
- Spreadsheets with bridging software: keep records in Excel/Google Sheets and use bridging tools (e.g. AbsoluteExcel, BTCSoftware) to submit. Cheaper but more fragile.
- Pure submission software: for those whose records are already digital somewhere else.
Pen-and-paper records and direct HMRC portal entry are no longer permitted in scope.
What''s not changing
- Self Assessment doesn''t disappear — there''s still a year-end finalisation, just by a different name.
- Tax payment dates stay the same — 31 January and 31 July for payments on account, 31 January for balancing payment.
- The tax itself doesn''t change — same rates, same allowances, same reliefs. MTD is about how you report, not what you''re reporting.
How to prepare in the next 12 months
If you''re likely in scope from April 2026:
1. Confirm your qualifying income
Look at your 2024/25 self-employment and rental income. If total gross is over £50,000, you''re in.
2. Pick MTD-compatible software now
Sign up to one of the cloud accounting providers. Most have free trials, then £10-£30/month. Get familiar with it before you''re obliged to use it. Migrating mid-tax-year is more painful than starting fresh.
3. Start digital record-keeping early
Even if your obligations don''t start until April 2026, run a parallel set of digital records for 2025/26. By the time MTD ITSA goes live, you''ll have a year''s practice and the software will already know your suppliers, customers, categories.
4. Set up bank feeds
Cloud accounting works best when transactions flow automatically from your bank. Set up Open Banking feeds for every business bank account, credit card, and merchant processor.
5. Plan the workflow
When are you going to bookkeep — weekly, monthly? When are you going to review the quarterly summary before submission? Build a routine before the deadlines force one.
6. Talk to your accountant
If you use an accountant, they''re likely already preparing — but check. Some accountants are charging more for MTD-handled clients (it''s more work for them) — agree the fee structure in advance.
What might still change
HMRC has delayed MTD ITSA twice already. There''s a meaningful chance of further delays or threshold tweaks. But the direction is clear, and the right move is to be ready ahead of the deadline rather than reactive.
Penalty regime: HMRC has signalled a "soft landing" first year — late quarterly submissions won''t trigger immediate penalties — but the principle is that quarterly compliance becomes mandatory.
What to do next
- Check whether your 2024/25 qualifying income exceeds £50,000. If yes, you''re in scope from April 2026.
- Pick and onboard MTD-compatible software in the next 90 days.
- Set up bank feeds and clear out any old categorisation backlog.
- Run digital record-keeping in parallel for at least 6 months before the mandatory start.