Making Tax Digital for Income Tax Self Assessment (ITSA)
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is the next phase of HMRC's digitalisation programme. Following the rollout of MTD for VAT, HMRC is extending the Making Tax Digital requirements to self-employed individuals and landlords who file Self Assessment tax returns. This article explains who will be affected, when the requirements begin, and how to prepare.
When Does MTD for ITSA Start?
According to HMRC's guidance on MTD for Income Tax, the programme is being introduced in phases based on income levels:
- From April 2026: Self-employed individuals and landlords with annual gross income over £50,000 from self-employment and/or property must comply with MTD for ITSA[1].
- From April 2027: The threshold drops to include those with annual gross income over £30,000[2].
HMRC has indicated that the threshold may be lowered further in future years, but no dates have been confirmed for those with income below £30,000. General partnerships were originally planned to be included but have been deferred, and no date has been set for their inclusion[3].
Who Will Need to Comply?
MTD for ITSA will apply to individuals who meet all of the following criteria, as described in HMRC's detailed guidance:
- They are registered for Self Assessment.
- They have income from self-employment and/or UK property (including furnished holiday lettings).
- Their qualifying income exceeds the relevant threshold (£50,000 from April 2026[1], £30,000 from April 2027[2]).
Income from employment, pensions, savings, dividends, or foreign property does not count towards the MTD for ITSA threshold[4]. Only income from self-employment and UK property rental is relevant.
What Changes Under MTD for ITSA?
The key changes compared to the current Self Assessment system are:
- Digital record-keeping. You must use MTD-compatible software to keep digital records of your business income and expenses[5]. Spreadsheets may be used with bridging software, similar to how MTD for VAT works.
-
Quarterly updates. Instead of submitting one annual tax return, you will need to send quarterly updates to HMRC
summarising your income and expenses.
These updates are due by the 7th of the month following the end of each quarter[6]:
- Quarter 1 (6 April to 5 July): update due by 7 August
- Quarter 2 (6 July to 5 October): update due by 7 November
- Quarter 3 (6 October to 5 January): update due by 7 February
- Quarter 4 (6 January to 5 April): update due by 7 May
- End of Period Statement (EOPS). After the end of the tax year, you submit a finalisation statement confirming that the quarterly updates are complete and accurate. This replaces the self-employment section of the current Self Assessment tax return.
- Final declaration. You still need to make a final declaration (equivalent to the current Self Assessment tax return) that brings together all your income sources and calculates your tax liability. This is due by 31 January following the tax year[7], the same deadline as the current Self Assessment return.
How to Prepare
Even though MTD for ITSA may not apply to you until April 2026 or later, there are steps you can take now to be ready:
- Start keeping digital records. If you are already using a DIY Accounting spreadsheet to record your income and expenses, you are well on your way. The spreadsheets provide a structured digital record of your business transactions.
- Get familiar with quarterly reporting. Consider reviewing your income and expenses quarterly, even if you are not yet required to submit quarterly updates. This will help you identify any gaps in your record-keeping and make the transition smoother.
- Check if you are affected. Review your gross income from self-employment and property to determine whether you will exceed the £50,000 threshold from April 2026[1] or the £30,000 threshold from April 2027[2].
- Watch for software updates. DIY Accounting will provide compatible software and guidance as the MTD for ITSA requirements are finalised. Keep an eye on diyaccounting.co.uk for updates.
How DIY Accounting Spreadsheets Can Help
DIY Accounting's spreadsheet packages for sole traders and self-employed businesses are designed to record income and expenses in a structured format that aligns with HMRC's requirements. The spreadsheets already calculate the figures needed for your Self Assessment tax return, and the same data can be used for the quarterly updates required under MTD for ITSA.
Just as DIY Accounting provides a free MTD VAT submission service at submit.diyaccounting.co.uk, the intention is to support MTD for ITSA submissions as the programme goes live.
Key Dates Summary
- April 2026: MTD for ITSA mandatory for self-employed and landlords with income over £50,000[1]
- April 2027: MTD for ITSA mandatory for self-employed and landlords with income over £30,000[2]
- Quarterly updates: Due by the 7th of the month after each quarter end[6]
- Final declaration: Due by 31 January following the end of the tax year[7]
Article generated by Claude Code for DIY Accounting, February 2026. All information sourced from GOV.UK and HMRC guidance linked inline.
Tax reference: Making Tax Digital for Income Tax Self Assessment – Source: GOV.UK: Find software compatible with Making Tax Digital for Income Tax (applicable tax year 2025/26)
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