Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is now one of the biggest changes to the UK tax system in decades. After several delays and years of testing, the rollout officially began in April 2026 for self-employed individuals and landlords earning more than £50,000 from qualifying income.
The first major milestone is approaching quickly. The first quarterly submission deadline is 7 August 2026, covering the period from 6 April 2026 to 5 July 2026. This date is widely seen as the first real test of how prepared taxpayers and accountants are for the new system.
Who needs to comply?
From April 2026, MTD for ITSA applies to:
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Sole traders
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Self-employed individuals
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Landlords
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Individuals with combined qualifying income above £50,000
The threshold will reduce further:
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£30,000 from April 2027
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£20,000 from April 2028
This means millions more taxpayers will eventually be brought into the system.
Why has there been so much discussion?
There has been significant press coverage around the number of people who still have not signed up for MTD-compatible software. HMRC has encouraged taxpayers to prepare early, but many businesses are still using spreadsheets or manual systems.
Some common reasons for delays include:
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Uncertainty about which software to choose
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Concerns over additional administration
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Lack of awareness
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Waiting to see how the first year develops
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Assuming another delay may happen
However, with the first submission deadline now close, businesses are beginning to realise that preparation can no longer be postponed.
How has the rollout gone so far?
The early stages of the rollout have been relatively controlled because only taxpayers above the £50,000 threshold are currently affected. HMRC also introduced a “soft landing” period for late quarterly submission penalties during the first year.
This has helped reduce pressure while businesses adapt to:
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Digital record keeping
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Quarterly submissions
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MTD-compatible software
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New workflows for bookkeeping and tax reporting
Many accountants have also spent the last year moving clients onto cloud accounting systems and educating them about the changes.
Despite this, there are still challenges:
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Some taxpayers are unclear about whether they qualify
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Not all software providers offer the same features
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Businesses with multiple income sources may find setup more complicated
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Digital confidence varies significantly among taxpayers
Why the August deadline matters
The first quarterly update deadline on 7 August 2026 is important because it represents the first live reporting period under mandatory MTD for ITSA.
This date will show:
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How many taxpayers are genuinely prepared
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Whether software providers can handle demand
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How effective HMRC’s guidance has been
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Whether businesses are maintaining proper digital records
It will also likely shape future government messaging around compliance and enforcement.
What happens next?
After the first year, HMRC is expected to tighten enforcement. While late quarterly updates during 2026/27 benefit from softer treatment, this will not continue indefinitely.
Businesses should expect:
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More active compliance monitoring
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Increased use of penalty points
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Greater expectations around digital record keeping
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Expansion to lower income thresholds
The next few years will effectively complete the transition away from traditional annual Self Assessment filing for sole traders and landlords.
How businesses should prepare
Businesses should not wait until the final weeks before a deadline. The best preparation steps include:
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Choosing MTD-compatible software
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Connecting business bank accounts
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Keeping digital records throughout the year
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Understanding quarterly deadlines
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Working closely with an accountant or adviser
The earlier businesses adapt, the easier the transition will become.
Early preparation is key
MTD for ITSA is no longer a future change, it’s already happening. While the first phase affects a smaller group of taxpayers, the long-term plan is clear: HMRC wants a fully digital tax system with more frequent reporting.
The first quarterly submission deadline in August 2026 will be a defining moment. Businesses that prepare now are likely to find the process manageable, while those who delay may face unnecessary stress as deadlines approach.
If you’d like help preparing for the August 2026 deadline, we offer a full MTD for ITSA accounting service designed specifically for those impacted by the new requirements. Find out more here.
