Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is the biggest change to UK tax administration in decades. From April 2026, sole traders and landlords with qualifying income above £50,000 must switch from a single annual Self Assessment return to quarterly digital reporting. April 2027 brings in those above £30,000. This guide compares the two systems side by side.
| Feature | Traditional SA | MTD ITSA |
|---|---|---|
| Submissions per year | 1 (annual SA100) | 6 (4 quarterly + EOPS + Final Declaration) |
| Filing deadline | 31 January (online) | Quarterly + 31 January Final Declaration |
| Software required | No (can use paper) | Yes — HMRC-approved MTD software |
| Software cost | £0 (HMRC online service) | ~£12–£30/month |
| Penalty for late filing | Fixed £100 + escalating | Points-based (£200 on threshold) |
| Record keeping | Annual summary sufficient | Digital records required throughout year |
| Cashflow visibility | Low — annual picture only | High — quarterly in-year view |
| Agent submission | Yes | Yes (agent-authorised software) |
Under traditional SA, HMRC provides a free online filing service. MTD ITSA requires approved software. Here are typical annual costs:
| Software | Monthly cost | Annual cost | Notes |
|---|---|---|---|
| QuickBooks Simple Start | £14 | £168 | MTD compatible |
| Xero Starter | £16 | £192 | Invoice + bank feeds |
| FreeAgent | £19 | £228 | Popular with freelancers |
| Spreadsheet + bridging | ~£5 | ~£60 | Lowest cost option |
| Traditional SA (HMRC) | £0 | £0 | Free government service |
