The way self-employed individuals and landlords report their income to HMRC is about to change. After several delays and false starts, from April 2026, Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) will begin rolling out, and it’s essential to be prepared.
Who needs to know?
If you’re an unincorporated sole trader or landlord with a combined turnover of £50,000 or more, MTD ITSA will apply to you from April 2026. The threshold drops to £30,000 in April 2027, and then to £20,000 in April 2028, eventually capturing nearly all sole traders and landlords.
This isn’t about paying tax differently – it’s about how you report your income. Traditional Self-Assessment tax returns will be replaced with:
What counts as qualifying income?
Only gross income from self-employment and property is considered. Income from salary, dividends, or interest does not count toward the MTD ITSA threshold.
If you’re VAT registered, you’re likely already familiar with MTD requirements. However, you’ll need to ensure your current software is HMRC-approved and supports the new reporting obligations.
Reporting deadlines
Quarterly updates must be submitted according to the following schedule:
| Quarter | Tax period | Calendar period | Filing deadline |
| 1 | 6 Apr – 5 Jul | 1 Apr – 30 Jun | 7 Aug |
| 2 | 6 Jul – 5 Oct | 1 Jul – 30 Sep | 7 Nov |
| 3 | 6 Oct – 5 Jan | 1 Oct – 31 Dec | 7 Feb |
| 4 | 6 Jan – 5 Apr | 1 Jan – 31 Mar | 7 May |
You can elect to use calendar quarters, but the filing deadlines remain unchanged.
Software matters
To comply, you’ll need HMRC-compatible software that supports digital record keeping and quarterly submissions. Some options cater specifically to landlords, while others bridge Excel with HMRC’s portal. If you own property jointly, your software must support multi-person reporting.
We’re happy to help you choose the most suitable and cost-effective solution.
What if you don’t comply?
HMRC will implement a points-based penalty system for late filings, missed payments, or failure to use compatible software. Avoid unnecessary penalties by preparing early.
What should you do?
The first action is to work out if and when MTD ITSA applies to you. If your gross income from self-employment and property in your 2024/25 tax return is £50,000 or more, you will be required to comply with MTD ITSA from April 2026.
It applies to you, now what?
If you already use accounting software:
If you use manual or Excel records:
If you need help, we would be happy to discuss your requirements with you, just get in touch.
