What is MTD ITSA?

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is an HMRC programme that changes how sole traders and landlords report their income. Instead of a single annual Self Assessment return, you submit quarterly digital updates to HMRC throughout the tax year, followed by a final end-of-year declaration.

The programme went live on 6 April 2026 for its first group of taxpayers. It will expand to cover more people in 2027 and 2028.

Who is affected, and when?

MTD ITSA rolls out in three phases based on income:

Phase 1 — April 2026: Sole traders and landlords with combined income (self-employment + property) over £50,000 per year.

Phase 2 — April 2027: Those with income over £30,000 per year.

Phase 3 — April 2028: Those with income over £20,000 per year.

Income below £20,000 is not currently in scope, though HMRC has indicated this threshold may reduce in future.

These thresholds apply to your qualifying income (self-employment and/or property) — not your total income if you also have PAYE employment income.

What do I actually need to do?

If you are in scope for MTD ITSA, you need to:

1. Choose HMRC-recognised software. Your software must appear on the GOV.UK software finder. This site reviews the main options to help you choose.
2. Sign up for MTD ITSA. Register via your Government Gateway account. You generally need to sign up before your obligation start date.
3. Keep digital records. Record your income and expenses digitally in your chosen software throughout the year.
4. Submit quarterly updates. At the end of each quarter (July, October, January, April), your software sends a summary of your income and expenses to HMRC.
5. Submit end-of-period statement (EOPS). At tax year end, you finalise your figures for each income source.
6. Submit final declaration. This replaces the annual Self Assessment return and confirms your overall tax position.

What are quarterly updates?

A quarterly update is not a tax payment — it is a summary of your income and expenses for that quarter, sent to HMRC digitally. HMRC uses this to estimate your tax liability in real time.

The four quarterly periods for MTD ITSA are:

• 6 April to 5 July (deadline: 5 August)
• 6 July to 5 October (deadline: 5 November)
• 6 October to 5 January (deadline: 5 February)
• 6 January to 5 April (deadline: 5 May)

Your software handles the submission — you categorise your income and expenses, then click submit.

What is bridging software?

Bridging software allows you to use a spreadsheet for record-keeping and then submit the figures to HMRC in the correct digital format. It is a valid approach under MTD ITSA rules, but it requires a separate bridging tool and adds a manual step. For most sole traders, dedicated MTD ITSA accounting software (FreeAgent, Zoho Books, QuickFile, etc.) is simpler and often comparable in price.

Do I need an accountant?

MTD ITSA does not require an accountant. The quarterly updates are summaries — not tax calculations — and most accounting software walks you through the process without professional knowledge. The final declaration, which determines your actual tax bill, is more involved and many users benefit from accountant review at year-end.

What happens to my current Self Assessment return?

Under MTD ITSA, the traditional Self Assessment tax return is replaced by the quarterly submission process plus an end-of-year final declaration. You no longer submit one large annual return.

For most taxpayers, the actual tax calculation process becomes more spread out through the year, which HMRC argues makes it easier to budget for your tax bill.

Further resources

• GOV.UK MTD ITSA guidance
• GOV.UK software finder
• HMRC penalty points system guidance