Answers · UK 2025/26
What is Making Tax Digital for Income Tax (MTD ITSA) and when does it start?
MTD for Income Tax Self Assessment (ITSA) requires landlords and self-employed people with income above GBP50,000 to keep digital records and submit quarterly updates to HMRC from April 2026. Those earning GBP30,000--GBP50,000 must comply from April 2027. Software will replace the annual tax return with quarterly submissions plus a final declaration.
Full answer
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is a major HMRC programme that replaces the traditional annual Self Assessment tax return with a new digital reporting system. The rollout timetable (confirmed): April 2026 -- mandatory for self-employed individuals and landlords with total qualifying income above GBP50,000 in the 2024/25 tax year or later. April 2027 -- mandatory for those with income between GBP30,000 and GBP50,000. Landlords and self-employed with income below GBP30,000 -- no mandation date confirmed yet; HMRC has stated it will consult further. How MTD ITSA works: instead of one annual return, businesses and landlords must: (1) keep digital records using MTD-compatible software (e.g. QuickBooks, Xero, FreeAgent, or HMRC-recognised apps); (2) submit quarterly updates to HMRC -- four times a year, reporting income and expenses for each quarter within one month of the quarter end; (3) submit a final declaration (previously called the End of Period Statement and Final Declaration) after the end of the tax year (by 31 January following the tax year), which finalises the figures and includes any personal allowances or adjustments. Quarterly updates are cumulative: they inform HMRC of in-year estimates for tax owed, making HMRC's records more accurate and potentially reducing end-of-year shocks. Multiple income sources: each source of income (self-employment business, rental income) requires a separate quarterly update. What stays the same: the 31 January payment deadline for the previous year's tax; the payment on account system; Self Assessment penalties (though MTD ITSA has its own penalty regime for late submissions). Exemptions from MTD ITSA: taxpayers who are digitally excluded (can demonstrate they cannot use computers due to age, disability, or location); businesses with income below the threshold; those with certain religious objections. Partnerships: partnerships are NOT included in the April 2026 or 2027 mandation -- a separate future date will be announced.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.