Answers · UK 2025/26

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax (MTD ITSA) is HMRC’s rule requiring self-employed people and landlords to keep digital records and send quarterly updates using approved software, instead of one annual Self Assessment return. It starts from April 2026 for higher-income taxpayers.

Last updated: 1 June 2026Last reviewed: 1 June 2026How we verify

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Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is a major change to how self-employed people and landlords report income to HMRC. Instead of filing a single annual Self Assessment tax return, affected taxpayers must keep digital business records and submit quarterly updates of income and expenses through HMRC-recognised software, followed by a final declaration after the tax year end. The aim is to reduce errors and give a more up-to-date view of tax owed. The phased rollout is based on qualifying income (gross income from self-employment and property before expenses). From April 2026 it applies to those with qualifying income over £50,000; from April 2027 the threshold drops to £30,000; and a further extension to those over £20,000 is planned for April 2028. Worked example: a landlord with £24,000 of rental income and a sole trade earning £30,000 has combined qualifying income of £54,000, so they must comply from April 2026 — keeping digital records and sending four quarterly updates plus a final declaration each year. Those below the thresholds continue with normal Self Assessment for now. You will need compatible software or bridging software linking to a spreadsheet; HMRC publishes a list. MTD ITSA applies UK-wide, including Scotland, though Scottish taxpayers still pay Scottish Income Tax rates. Penalties move to a points-based system for late submissions. Use the Income Tax and Self-Employed Tax calculators to estimate your liability between updates.