Making Tax Digital for Income Tax (MTD for ITSA) is no longer something to think about later. From 6 April 2026, self-employed individuals and landlords with qualifying income over £50,000 must keep digital records and submit quarterly updates to HMRC. The deadline is real, and the preparation time is shorter than most people think.
This is a plain-English guide to what it means, who it affects, and what you need to do.
What is MTD for Income Tax?
MTD for Income Tax is HMRC’s programme to move self-assessment tax reporting from an annual process to a quarterly one. Instead of filing a single Self Assessment return by 31 January each year, you will submit four quarterly updates throughout the year — each summarising your income and expenses for that quarter — followed by a Final Declaration at year end.
The objective is to make tax records more accurate and up to date. The practical consequence is that paper records and annual spreadsheets are no longer sufficient. You need compatible software.
Who does it affect — and when?
MTD for ITSA is being introduced in phases based on qualifying income. Qualifying income means your total gross income from self-employment and property combined — not your profit, and not your employment income or dividends.
| Phase | Start date | Qualifying income threshold |
|---|---|---|
| Phase 1 | April 2026 | Over £50,000 |
| Phase 2 | April 2027 | Over £30,000 |
| Phase 3 | April 2028 | Over £20,000 |
If you have both a trade and rental income, the two are added together. A self-employed person earning £35,000 from freelance work and £20,000 in rental income has £55,000 in qualifying income — they are in scope for April 2026.
What changes in practice?
Quarterly updates — four times per year, you submit a summary of your income and expenses to HMRC. These are not tax returns. They are progress reports. The deadlines are:
- 5 August (April to June quarter)
- 5 November (July to September quarter)
- 5 February (October to December quarter)
- 5 May (January to March quarter)
Digital records — your income and expenses must be kept digitally in HMRC-recognised software throughout the year. You cannot maintain paper records and enter annual totals.
Final Declaration — by 31 January each year, you submit your Final Declaration, which confirms all your income for the year including any sources not covered in the quarterly updates (dividends, employment income, bank interest). This replaces the current Self Assessment return.
What software do you need?
HMRC requires MTD-compatible software. There are several options on the market. The right choice depends on how complex your finances are and how hands-on you want to be.
If you work with an accountant, they will typically manage the quarterly submissions on your behalf using their own software. You provide the records; they handle the submissions.
Do you need to register?
Yes. You or your accountant needs to sign you up for MTD for ITSA with HMRC before your go-live date. If you have a tax agent, they do this through their Agent Services Account. It does not happen automatically.
What if you have multiple income sources?
You submit separate quarterly updates for each income source — one for each trade and one for each property business. However, you only submit one Final Declaration at year end, which consolidates everything.
What about partnerships?
General partnerships are not in scope for the current phases. HMRC has indicated they will be brought into MTD at a later date, but no specific timeline has been confirmed.
The practical checklist
If your qualifying income is above £50,000, here is what needs to happen before April 2026:
- Confirm your qualifying income figure
- Register for MTD for ITSA with HMRC
- Move to MTD-compatible software if you are not already using it
- Understand the quarterly deadlines and build them into your workflow
- Brief your accountant — or appoint one if you do not have one
A note on penalties
HMRC has confirmed that a new penalty regime applies to MTD for ITSA. Late submissions and late payments attract points-based penalties. The details are still being finalised, but the direction is clear: the cost of non-compliance is rising.
If you are unsure whether you are in scope, or you want to get set up ahead of April 2026, book a free consultation and we will talk you through it. We are already MTD-ready and have been onboarding clients onto the new system throughout 2025.