Answers · UK 2025/26
What is Making Tax Digital for Income Tax (MTD ITSA)?
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) will require self-employed people and landlords with income over £50,000 to submit quarterly digital updates to HMRC from April 2026. Those earning £30,000–£50,000 follow in April 2027. HMRC-compatible software will replace the annual SA return for these taxpayers.
Full answer
**Making Tax Digital for Income Tax Self Assessment (MTD ITSA)** is HMRC's programme to digitise income tax reporting for self-employed individuals and landlords. It replaces the traditional annual Self Assessment tax return for affected taxpayers with quarterly digital submissions. **MTD ITSA rollout timeline:** | Phase | Who is affected | From when | |---|---|---| | Phase 1 | Self-employed & landlords with gross income > £50,000 | **April 2026** | | Phase 2 | Self-employed & landlords with gross income £30,000–£50,000 | **April 2027** | | Phase 3 | Self-employed & landlords with gross income £20,000–£30,000 | TBC (expected 2028) | | Partnerships | General partnerships | TBC | **What quarterly updates involve:** Each quarter, you submit a digital summary of income and expenses via HMRC-compatible software. The four quarters align with the tax year (April–July, August–October, November–January, February–March). The updates are not tax calculations — they inform HMRC of your trading position. **End-of-period statement and final declaration:** At the end of the tax year, you submit an end-of-period statement with adjustments, and then a final declaration (replacing the SA return) confirming your total income from all sources. **Compatible software:** HMRC maintains a list of approved software at gov.uk. Current options include: QuickBooks, FreeAgent, Xero, Sage, TaxCalc, and several others. Free software options are limited — HMRC is not providing its own tool. **Exemptions:** - Digitally excluded individuals (disability, religious objection to internet use) - Those below the income threshold - PAYE employees with no other income above the threshold - Trustees and personal representatives of estates **Landlords — important note:** Property income counts separately from self-employment income for the threshold. A landlord with £55,000 rental income enters Phase 1 in April 2026 even if they have no self-employment income. **MTD VAT — already mandatory:** MTD VAT has been mandatory for all VAT-registered businesses since April 2022. MTD ITSA builds on the same digital infrastructure.
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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.