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Making Tax Digital for Income Tax (MTD for ITSA) is an HMRC initiative that changes how self-employed individuals and landlords report their income and tax.
Instead of submitting one Self Assessment tax return each year, you will be required to keep digital records and send regular updates to HMRC throughout the year, followed by a final year-end confirmation.
Yes. MTD for ITSA is a legal requirement introduced by HMRC. If you fall within the scope of the rules, you must comply. It is not optional and not something you can opt out of.
MTD for ITSA applies to:
Sole traders
Self-employed individuals
Landlords with rental income
Individuals with a combination of business and property income
HMRC is introducing MTD for ITSA in stages:
From April 2026 – Applies to individuals with qualifying income over £50,000
From April 2027 – Applies to individuals with qualifying income over £30,000
From April 2028 – HMRC plans to extend MTD further, with details to be confirmed
Qualifying income includes total self-employed income and rental income combined.
If your income is close to a threshold, it’s important to prepare early.
Currently, most people submit one tax return after the tax year ends.
Under MTD for ITSA:
Records must be kept digitally
Four quarterly updates are submitted during the year
A year-end statement is completed
A final declaration confirms your tax position
Quarterly updates are simple summaries of your income and expenses submitted every three months. They are not full tax returns and are not final figures.
No. Quarterly updates are for reporting purposes only. Tax payment dates and rules do not change.
You must keep digital records of:
Income received
Allowable business or property expenses
Dates and amounts of transactions
These records must be maintained using HMRC-approved software.
HMRC may apply late submission penalties once MTD for ITSA is fully enforced.
Keeping up to date reduces the risk of penalties and HMRC enquiries.
If you have multiple income sources, they are all reported under MTD for ITSA.
Quarterly updates may be required for each type of income.
Yes. HMRC requires the use of approved accounting software.
Spreadsheets alone are not sufficient unless they are linked to compatible MTD software.
You can manage MTD yourself, but you must ensure records are accurate and submissions are made on time.
Many people choose professional support to reduce stress and errors.
False: MTD for ITSA does not increase tax rates or change how tax is calculated. It only changes how information is reported.
False: Quarterly updates are reporting only. Tax payment dates remain unchanged.
False: Quarterly updates are not final. The final tax position is confirmed at year-end.
False: If MTD for ITSA applies to you and you do nothing, HMRC may apply penalties once enforcement begins.
