Answers · UK 2025/26
What is Making Tax Digital (MTD) for Income Tax?
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) requires self-employed and landlords with gross income above £50,000 to keep digital records and submit quarterly updates from April 2026. Threshold drops to £30,000 from April 2027, £20,000 from April 2028.
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UK Making Tax Digital for Income Tax (MTD ITSA) rollout schedule. From 6 April 2026: mandatory for self-employed sole traders and landlords with combined gross self-employment + property income above £50,000/year (based on 2024/25 tax return). From 6 April 2027: threshold reduces to £30,000. From 6 April 2028: threshold reduces to £20,000. Requirements: keep digital records of income and expenses; submit 4 quarterly updates per year (within 1 month of each quarter end); submit a final declaration by 31 January following the tax year. Software must be MTD-compatible — HMRC publishes approved software list (FreeAgent, QuickBooks, Xero, Sage, etc.); some free options for small users. Penalties: new points-based system — accumulate points for late submissions; £200 fine at the threshold. Excluded: directors of limited companies (separate MTD for Corporation Tax planned later), partnerships (later phase), trusts. VAT-registered businesses are already in MTD (since April 2022 for all VAT-registered). Practical impact: invest in cloud accounting software early; bookkeeping becomes mandatory rather than year-end catch-up.
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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.