Making Tax Digital for Income Tax Self Assessment (MTD ITSA) went live in April 2026 for sole traders and landlords earning over £50,000. If that’s you, you’re now required to keep digital records and submit quarterly updates to HMRC — and if you haven’t started yet, it’s time to act.
What Is MTD for Income Tax?
MTD for Income Tax replaces the traditional Self Assessment tax return for those it applies to. Instead of one annual submission, you now need to:
- Keep digital records of all income and expenses
- Submit four quarterly updates to HMRC each tax year
- Submit a final declaration (replacing your Self Assessment return) by 31 January after the tax year ends
Who Does It Apply To?
From April 2026, MTD for Income Tax applies to sole traders and landlords with total gross income over £50,000. From April 2027, the threshold drops to £30,000. HMRC has confirmed a further rollout to those earning over £20,000 at a later date.
You need to count income from all qualifying sources — so if you’re both a sole trader and a landlord, your combined income determines whether you’re in scope.
The Quarterly Deadlines You Need to Know
MTD quarterly updates follow the tax year (6 April to 5 April). The four submission deadlines are:
| Quarter | Period | Submission Deadline |
|---|---|---|
| Q1 | 6 April – 5 July | 5 August |
| Q2 | 6 July – 5 October | 5 November |
| Q3 | 6 October – 5 January | 5 February |
| Q4 | 6 January – 5 April | 5 May |
If you missed the Q1 deadline on 5 August, don’t panic — submit as soon as possible. HMRC is taking a light-touch approach to penalties in the first year, but this won’t last indefinitely.
What Do You Actually Submit?
Each quarterly update is a summary of your business income and expenses for that period. You’re not paying tax at this stage — you’re simply reporting figures to HMRC in real time. The quarterly updates do not replace the need for accurate bookkeeping; they depend on it.
At the end of the tax year, you’ll submit an End of Period Statement (EOPS) to confirm your figures, then a Final Declaration to confirm your total income from all sources and calculate your tax liability.
What Software Do You Need?
HMRC does not provide its own free MTD software. You’ll need MTD-compatible accounting software such as QuickBooks, Xero, FreeAgent, or Sage. Spreadsheets can be used, but they must be connected to HMRC via a bridging software tool.
Choosing the right software depends on your business type, transaction volume, and budget. Getting this wrong now creates problems later — it’s worth taking advice before locking in.
How Westridge Accountants Can Help
At Westridge Accountants in Hayes, we’re helping clients across West London navigate MTD for Income Tax — from choosing and setting up compliant software, to handling quarterly submissions and your final declaration.
We’re available 7 days a week, 8am to 10pm, so you can get MTD support when it suits you — not just during standard office hours.
If you’re not sure whether MTD applies to you, or you need help getting set up, get in touch today. We’ll make sure you’re compliant and that your first quarterly submission goes smoothly.
