What Is Making Tax Digital for Income Tax? A Guide (2026)
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) explained simply: who it affects, what changes, when it starts, and what you actually have to do — quarterly updates, digital records and the final declaration.
The short answer
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is a new way of reporting self-employment and property income to HMRC. Instead of one Self Assessment tax return a year, you keep digital records and send HMRC a quarterly update every three months, then a final declaration after the tax year ends. It's mandatory from 6 April 2026 for people with gross self-employment and/or property income over £50,000, dropping to £30,000 in April 2027 and £20,000 in April 2028.
If you're self-employed or a landlord, Making Tax Digital for Income Tax Self Assessment (MTD for ITSA, sometimes called MTD ITSA) is the biggest change to how you deal with HMRC since Self Assessment moved online. This guide explains what it is, who it affects, and what you actually have to do — without the jargon.
The one-sentence version
Instead of filing one Self Assessment tax return a year, you now keep digital records and send HMRC a short quarterly update every three months, followed by a final declaration after the tax year ends.
That's it. The tax you owe is calculated the same way — MTD changes the reporting, not the rules on what's taxable.
Who does MTD for Income Tax self Assessment apply to?
MTD for Income Tax Self Assessment applies to sole traders and landlords — people with income from self-employment and/or property — once their gross income crosses a threshold. It's being phased in:
| From | Gross qualifying income over |
|---|---|
| 6 April 2026 | £50,000 |
| 6 April 2027 | £30,000 |
| 6 April 2028 | £20,000 |
A few things worth knowing about the threshold:
- "Gross" means turnover, not profit — your total income before expenses and before any tax already taken off (like CIS deductions).
- It's tested on your combined self-employment and property income.
- HMRC looks at your 2024/25 tax return to decide whether you're in the first wave from April 2026.
It does not currently apply to companies (they have Corporation Tax) or, in the first phases, to partnerships — HMRC has deferred those.
What actually changes for you
There are three core obligations under MTD.
1. Keep digital records
You must keep your income and expenses in a digital format — in MTD-compatible software, or in a spreadsheet linked to bridging software. Paper records or a shoebox of receipts alone no longer meet the requirement.
2. Send a quarterly update
Every three months you send HMRC a summary of your income and expenses for each business. These are cumulative (year-to-date) totals, and they're an estimate-in-progress — you're not finalising anything, just keeping HMRC updated. The standard quarters and deadlines are:
| Quarter | Period | Deadline |
|---|---|---|
| Q1 | 6 Apr – 5 Jul | 7 Aug |
| Q2 | 6 Jul – 5 Oct | 7 Nov |
| Q3 | 6 Oct – 5 Jan | 7 Feb |
| Q4 | 6 Jan – 5 Apr | 7 May |
(You can elect for "calendar" quarters ending on the last day of the month instead, which many people find tidier.)
3. Make a final declaration
After the tax year ends, you confirm your final figures, add any other income (employment, dividends, savings, pensions and so on), claim your reliefs, and declare that everything is complete and correct. This replaces the old SA100 Self Assessment return. The final declaration for 2026/27 is due by 31 January 2028 — the same deadline you're used to.
What stays the same
It's easy to panic, so it's worth being clear about what doesn't change:
- Your tax bill is calculated the same way. Same personal allowance, same rates, same reliefs.
- Payment dates are the same — 31 January and (for payments on account) 31 July.
- Allowable expenses still apply — you don't lose the ability to deduct costs.
Why is HMRC doing this?
The stated aim is fewer errors and a more up-to-date picture of what people owe, by nudging everyone into digital record-keeping and more frequent reporting. Whatever the rationale, the practical upshot is simple: you need software, and a routine of updating it and filing each quarter.
What you need to get started
- Confirm whether you're in scope using the thresholds above.
- Choose MTD-compatible software that HMRC recognises. HMRC no longer offers its own free online return for people inside MTD, so this is required.
- Keep records digitally from the start of the tax year.
- Diarise the quarterly deadlines so nothing slips.
Where ThisQuarter fits. ThisQuarter is a desktop app for accountants and individuals that keeps your records on your own machine (encrypted) and submits your quarterly updates and final declaration directly to HMRC — with first-class support for construction/CIS clients. If you'd like a straightforward way to stay compliant, see how ThisQuarter works.
The bottom line
MTD for Income Tax turns one annual return into a light-touch quarterly rhythm plus a year-end declaration. If you get set up with the right software and keep your records current, each quarterly update takes minutes — and the final declaration becomes a review step rather than a scramble.
Frequently asked questions
What is Making Tax Digital for ITSA in simple terms?
It's a change to how you report income to HMRC. Rather than filing one Self Assessment return a year, you keep your records digitally and send HMRC a short quarterly update every three months, then confirm the full picture with a final declaration after the tax year. The amount of tax you owe is worked out the same way — only the reporting changes.
When does MTD for ITSA start?
It's mandatory from 6 April 2026 for sole traders and landlords with gross qualifying income over £50,000. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.
Do I still file a Self Assessment tax return under MTD?
Not the old SA100. The final declaration replaces it. You'll still report the same information — business profits, property income, and other income like dividends or employment — but you do it through MTD-compatible software instead of HMRC's online return.
Does MTD mean I pay more tax?
No. MTD changes how and when you report, not how your tax is calculated. Your allowances, reliefs and expenses all still apply.
What software do I need for MTD for Income Tax?
You need software that HMRC recognises for MTD for ITSA — it keeps your digital records and sends the quarterly updates and final declaration to HMRC. HMRC no longer offers a free online return for people in MTD scope, so third-party software is required.
Related reading
Who Is Exempt from Making Tax Digital for Income Tax?
Who doesn't have to follow MTD for Income Tax: income below the threshold, digitally excluded people, and specific groups HMRC has exempted or deferred — plus how to apply for an exemption.
MTD for Income Tax Deadlines & Thresholds: 2026, 2027 & 2028
Every Making Tax Digital for Income Tax date and threshold in one place: who joins when, the £50k/£30k/£20k phases, quarterly update deadlines, and the final declaration cut-off.
The Final Declaration: How MTD Replaces the SA100 Tax Return
What the Making Tax Digital final declaration is, how it replaces the old SA100 Self Assessment return, what income you add at year-end, and the crystallisation step that finalises your tax.