Glossary · UK
What is Making Tax Digital for Income Tax (MTD ITSA)?
HMRC's requirement for many sole traders and landlords to keep digital records and submit quarterly updates.
Full Definition
Making Tax Digital for Income Tax Self Assessment is HMRC's programme requiring eligible self-employed individuals and landlords to keep digital business records and report income and expenses using compatible software. Instead of a single annual return, affected taxpayers send quarterly updates plus a final declaration after the tax year. The rules are being phased in by income level, starting with those whose combined self-employment and property income is above a set threshold, then extending to lower thresholds in later phases. The aim is to reduce errors and bring reporting closer to real time. Existing Self Assessment payment deadlines, including Payments on Account, continue to apply. Penalties operate on a points-based system for late submissions. Software costs and process changes are practical considerations. Always check the latest start dates, thresholds and exemptions on gov.uk, as the timetable has shifted repeatedly.