Making Tax Digital (MTD)
UK tax glossary · Last reviewed: April 2026
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) will require sole traders and landlords with income over £50,000 to keep digital records and submit quarterly updates to HMRC from April 2026. Those with income over £30,000 follow in April 2027.
Instead of an annual Self Assessment return, businesses must submit four quarterly updates plus an end-of-year declaration. The quarterly updates are summaries of income and expenses; no tax payment is due with them — tax is still settled in January and July.
Compatible software (such as accounting apps like QuickBooks, Xero, or FreeAgent) must be used. HMRC is not building a standalone free tool. Landlords and self-employed people should review their record-keeping now to avoid last-minute changes.
Common questions
Does MTD for ITSA affect VAT-registered businesses?
MTD for VAT already applies to all VAT-registered businesses. MTD for ITSA is a separate obligation for sole traders and landlords that relates to Income Tax rather than VAT.
What if my income is below the MTD threshold?
You continue to file an annual Self Assessment return as before. The threshold is based on total gross income from self-employment and property combined. Review your position annually as thresholds may fall further.
Related resources
TaxHelper provides general information based on published HMRC rates and guidance. It is not regulated financial or tax advice. For decisions involving significant sums, complex circumstances, or if you are unsure, speak to a qualified accountant or HMRC directly.