Making Tax Digital Income Tax Self Assessment

Helping you get ready for HMRC’s move to digital tax reporting.

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is HMRC’s new way of reporting income and expenses. Instead of submitting one annual tax return, you’ll keep digital records and send updates to HMRC during the year using compatible software.

This means submitting quarterly updates (four times a year), along with a final end-of-year submission to confirm your figures, rather than the once-a-year Self Assessment that sole traders and landlords are currently used to.

  • HMRC’s Making Tax Digital for Income Tax Self Assessment (MTD ITSA) applies to individuals who receive income from self-employment and/or property rental income.

    From April 2026, it will apply to those with qualifying annual turnover (gross income before expenses) above the HMRC threshold:

    • From April 2026: income over £50,000

    • From April 2027: income over £30,000

    • From April 2028: income over £20,000

    How do I know if I need to use MTD ITSA in April 2026?

    To determine whether you must join MTD ITSA in April 2026, you should look at your total turnover for the 2024/25 tax year (6 April 2024 to 5 April 2025).

    This is because HMRC will use your most recent submitted Self Assessment figures to assess whether you meet the threshold.

    Turnover means your total income before any expenses are deducted, not your profit.

    Key point

    The MTD ITSA threshold is based on turnover, not profit, so you should look at your total gross income for the relevant tax year rather than your net taxable profit.

    HMRC’s Making Tax Digital rules continue to evolve, so guidance may change over time. The information on this page was accurate at the time of publication in May 2026.

  • Quite a bit. Instead of one annual return, you'll need to maintain digital records throughout the year and submit quarterly updates. The final year-end declaration broadly replaces the current Self Assessment return.

    If you've been managing this yourself, MTD ITSA is likely the point at which it makes sense to get some support in place.

  • Under HMRC’s MTD ITSA rules, you will usually submit four quarterly updates each tax year, followed by a final end-of-year submission.

    The standard reporting periods are:

    • Quarter 1: 6 April – 5 July → due by 5 August

    • Quarter 2: 6 July – 5 October → due by 5 November

    • Quarter 3: 6 October – 5 January → due by 5 February

    • Quarter 4: 6 January – 5 April → due by 5 May

    Quarterly updates are designed to give HMRC an ongoing picture of your income and expenses throughout the year, rather than detailed tax reporting.

    Submissions are made on a cumulative (year-to-date) basis. For example, in the second quarter, you’ll report figures covering the first six months of the tax year, rather than just the second three-month period.

    After the fourth quarter, you will also complete an end-of-year finalisation. The end-of-year finalisation confirms your final income and expenses for the year and determines your final tax position. Once you are within MTD ITSA, this replaces the traditional Self Assessment tax return for that income.

  • Your employment income (salary) is reported by your employer through PAYE as normal and is not included in MTD ITSA. Under MTD ITSA, you only report your self-employment and/or rental income and expenses, with the reporting threshold based on gross income (turnover), not profit.

  • Yes, under HMRC’s MTD ITSA rules, you will need compatible digital software to keep records and submit your quarterly updates and end-of-year finalisation. There are a range of MTD-compatible platforms available.

    We recommend Xero, as it’s simple to use, widely supported, and integrates well with bookkeeping processes. However, we can also work with other platforms if you already use something different or prefer an alternative.

    The key requirement is simply that the software is HMRC-recognised and MTD-compatible, so your submissions can be sent digitally in the correct format.

  • No, MTD changes how you report, not the basic timing of when tax is paid. So you’re reporting more regularly, but your tax payments still follow the existing Self Assessment payment system.

  • We offer fixed monthly packages, which include bookkeeping and four quarterly update submissions to HMRC.

  • Getting started is simple. Reach out through our contact form or WhatsApp, call or email to schedule a discovery call. We will walk you through the next steps and answer any questions along the way.