Making Tax Digital for Income Tax: what changes on 6 April 2026
From 6 April 2026, sole traders and landlords earning over £50,000 must keep digital records and report to HMRC quarterly. Here is exactly what changes — and how to get ready.
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is the biggest change to the UK tax system in a generation. It replaces the single annual Self Assessment return with digital record-keeping and quarterly reporting to HMRC through compatible software.
If you are a sole trader or a landlord, this will almost certainly affect you over the next few years — so it pays to understand the timeline now.
Who is affected — and when
“Qualifying income” means your gross income from self-employment and property before expenses — not your profit. Many people who assume they are below the threshold will find they are not.
- From 6 April 2026 — sole traders and landlords with qualifying income over £50,000
- From 6 April 2027 — the threshold falls to £30,000
- From April 2028 — planned to fall again to £20,000
What you must do differently
The quarterly deadlines fall on 7 August, 7 November, 7 February and 7 May, with the final declaration due by 31 January after the tax year ends.
- Keep your business records digitally in MTD-compatible software
- Send HMRC a summary update every quarter, instead of one annual return
- Submit a final declaration after the tax year end, confirming your figures
What happens if you miss the rules
HMRC has introduced a points-based penalty system for late submissions: each missed deadline earns a point, and reaching the threshold triggers a £200 penalty. Separate penalties and interest apply to late payment of tax. Getting set up correctly from the start is far cheaper than catching up later.
How to get ready
We offer a free MTD readiness check and fixed-fee setup, including software configuration and handling your quarterly filings. Get in touch and we will tell you exactly where you stand.
- Check whether — and from when — MTD applies to you
- Choose MTD-compatible software (we support Xero, QuickBooks, Sage, FreeAgent and VT)
- Move your record-keeping over well before your start date
- Decide who files the quarterly updates — you, or your accountant
Want this handled for you?
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