Making Tax Digital (MTD) for Income Tax Self-Assessment

MTD for ITSA

As of 15 May 2025, HMRC has officially extended Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) to apply to sole traders and landlords who earn above certain income thresholds. This is part of HMRC’s plan to modernise and streamline tax reporting – replacing the annual “big return” with ongoing, accurate digital updates throughout the year. Here’s what you need to know to stay compliant:

Who needs to use MTD for ITSA?

You must use MTD if all of the following apply:

1. You’re a sole trader or landlord registered for Self Assessment.
2. You have income from self-employment or property.
3. Your qualifying income for a tax year exceeds:

• £50,000 → MTD mandatory from 6 April 2026.
• £30,000 → MTD mandatory from 6 April 2027.
• Note HMRC plans to lower the threshold even further in the future

 
What exactly is “qualifying income”?
Qualifying income includes total self‑employment and property income, before deducting any expenses. HMRC determines your requirement based on the latest filed tax return.

So, for example:

• If your total income for 6 Apr 2024 – 5 Apr 2025 exceeds £50k, then MTD becomes compulsory from 6 Apr 2026.
• For income above £30k in the 2025–2026 tax year, MTD begins 6 Apr 2027.

 
What’s the filing timeline?

1. 31 Jan 2026 – File your Self Assessment for 2024/25 (as usual).
2. HMRC checks your qualifying income — if >£50k, you’ll receive a notification requiring MTD from 6 Apr 2026
3. MTD official timeline:

• From 6 Apr 2026: Keep digital records and submit quarterly updates.
• Final declaration for that year due by 31 Jan following the tax year-end.

What You Need to Do

1. Check your 2024/25 qualifying income
Review your Self Assessment return due 31 Jan 2026:

• If income > £50k → MTD starts 6 Apr 2026.
• If income > £30k → MTD starts 6 Apr 2027.

2. Choose MTD-compatible software
From the required date, you’ll need:

• Digital tools to capture income and expense records.
• Ability to submit quarterly updates.
• Capacity to file final declarations.
•  HMRC provides a list of approved software and FileTax N Go can provide you with recommendations

3. Sign up in time
Though HMRC will send reminders, it's your responsibility to register and prepare before the mandatory date .

4. Keep records digitally
From your start date, make sure:

• Income and expenses are recorded digitally.
• You can correct and adjust records in the software.
• Quarterly submissions include true totals.
• Final declaration aligns with your annual Self Assessment.

5. Don’t miss deadlines
Penalties apply if you:

• Don’t submit quarterly updates.
• Miss the final year-end declaration.
•  You’ll be notified when you become liable for these

Need Help Getting Set Up for MTD? We’ve Got You Covered
At FileTaxnGo, we know that Making Tax Digital can feel like a big change — but you don’t have to go it alone.
We offer a full support package to help sole traders and landlords prepare for MTD with confidence, including:

MTD-Ready Software Set-Up
We’ll recommend the best HMRC-approved software for your needs — whether you’re a landlord with one property or a sole trader juggling multiple income streams. We’ll get everything set up and show you how to use it.

Quarterly Submission Support
Not keen on handling quarterly submissions yourself? No problem. We can manage the entire process for you — including checking records, submitting updates, and keeping you on track.

Digital Record-Keeping Guidance
We’ll show you how to keep your records digitally, what to include, and how to avoid common pitfalls. Prefer to snap receipts and go? We’ll tailor a solution around that.

Registration with HMRC
When the time comes, we’ll handle the MTD registration process for you, so you’re fully enrolled and ready to go before the deadline.

Peace of Mind
From your first quarterly update through to your final end-of-year declaration, we’ll make sure you stay compliant — and avoid any MTD-related penalties.

Ready to get started or want to chat it through?
Drop us a message or give us a call — we’re happy to talk through your situation and build an MTD support plan that works for you.

Let FileTax N Go take the stress out of Making Tax Digital.