From April 2026 the UK government is rolling out Making Tax Digital for Income Tax (MTD‑ITSA) for sole traders and landlords whose income from businesses or property exceeds £50,000.

If you hit that threshold, instead of one annual Self Assessment return you’ll need to send four quarterly updates during the year plus a final declaration.

You’ll also need to keep digital records using software that’s compatible with HMRC’s requirements. That means moving away from spreadsheets or paper in many cases.

In this video we cover what the changes are to MTD, why they matter, and how to prepare so you’re not left scrambling.

Key Deadlines & Thresholds to Know

The quarterly update deadlines fall on the 7th of the month after each quarter ends.

April 2026: MTD for Income Tax becomes mandatory for those with qualifying income over £50,000 (from self‑employment or property).

April 2027: Threshold lowers to £30,000.

What It Means in Practice

Once you’re inside the scheme:

• You’ll use cloud or compatible accounting software to record income and expenses in digital form.
• Every three months you’ll send a summary of your trading or property profit & loss to HMRC. These are not full transactional details, but summaries that show where you are year‑to‑date.
• If you discover mistakes in one quarter, you can correct them in the next one since the totals are cumulative.
• At the end of the year there's still a final declaration (something like the old Self Assessment) to confirm all sources of income, to claim reliefs/allowances, and to finalise your tax bill.

Why This Can Be Positive

Change can feel scary but there are some real upsides if you embrace this:

• You’ll have up‑to‑date, real‑time visibility of your income and expenses, which helps with planning and making decisions.
• It reduces 'year‑end surprises' because you’ll know roughly what tax might be coming.
• Conversations with your accountant are smoother if you both look at the same live numbers rather than sending backups, waiting, etc.
• You’ll be better placed for tax planning throughout the year, not just scrambling in January.

What You Need to Do Now to Be Ready

To avoid last‑minute scramble:

1. Check whether your income from business + property will exceed the thresholds.
2. Choose software that's MTD‑approved and get familiar with it now. If you’re not already in the cloud, start moving.
3. Ensure your records are up to date and clean. Missing or messy records will make quarterly updates painful.
4. Talk to your accountant about how this will affect you, and what planning can smooth the process.

Common Concerns and How We Help

• Yes, it’s more work: There’s a learning curve, but once your system is set up, it becomes part of your regular rhythm.
• Fear of new penalties: HMRC is introducing a points‑based penalty regime for missed deadlines. But with clear processes and good record keeping, you avoid problems.
• Software costs: Some extra cost or time to switch tools, but for many the time saved in admin and avoiding late payment interest will offset that.

Wrap Up: Embrace the Change

MTD for Income Tax isn’t simply another compliance hoop - it’s an opportunity. If you move early, get your numbers organised, and lean on your accountant, this can help you run your business with more confidence, clarity, and control.

Get the Business You Want

If you’re feeling overwhelmed by the upcoming MTD‑ITSA changes, or unsure what steps to take, we can help. Let’s work together to make your tax planning smoother, help you stay ahead, and make sure you’re getting the business you want. Get in touch

Sources:

gov.uk

ThomasReuters

Xero