Making Tax Digital for Income Tax: who's affected and when
The MTD ITSA timetable, what quarterly updates actually involve, and how sole traders and landlords should prepare.
Making Tax Digital for Income Tax (MTD ITSA) replaces the single annual Self Assessment with digital record-keeping and quarterly updates for the self-employed and landlords. It's the biggest change to personal tax administration in a generation, arriving in waves by income.
The timetable
'Qualifying income' is gross income (turnover, not profit) from self-employment and property combined, measured from your most recent filed return — which is why HMRC letters about 2026 mandation reference your 2024/25 figures.
- April 2026: mandatory where qualifying self-employment + property income exceeds £50,000
- April 2027: threshold drops to £30,000
- April 2028: announced drop to £20,000
What actually changes
Records must be kept digitally in MTD-compatible software. Each quarter, a summary of income and expenses goes to HMRC (four updates a year); after year end, a final declaration replaces the old return, adding reliefs and other income. The quarterly updates are not tax bills — payment dates stay as they are for now — but they are deadlines with a penalty-points regime for lateness.
How to prepare without pain
Anyone already on cloud bookkeeping barely notices MTD — the quarterly update is a button press from clean records. Anyone running the year from a carrier bag will find quarterly deadlines transform mess from an annual problem into a rolling one. The move that works: adopt digital record-keeping a year before your mandation date, so the habit exists before the obligation. Our bookkeeping plans (from £49/month) are MTD-ready and include the quarterly submissions when your date arrives.
General guidance, not personal advice — rules change and circumstances differ. See our advice disclaimer.