Making Tax Digital for Income Tax | What self-employed individuals & landlords need to know before 2026

Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) is now firmly on the horizon, and this time, the timeline looks set in stone. HMRC has been in active contact with high-level accountancy professional bodies, reinforcing the message that the rollout is going ahead as planned. The aim of this reform is clear: to reduce reporting errors, improve efficiency, and close the tax gap through real-time digital reporting.

The Making Tax Digital programme for self-employed and landlords will be one of the most significant shifts in UK tax compliance in recent years. The journey began with VAT in 2019, but MTD for Income Tax will have a much broader impact. The countdown has begun, with HMRC already contacting self-employed individuals and landlords it believes fall within the scope of the new rules. If you’re one of them, this reform will fundamentally change how you report income and manage your tax affairs.

Here’s what you need to know — and how we can help you get ready.

What is Making Tax Digital for Income Tax and who does it affect?

MTD ITSA is HMRC’s next major step in digitalising the UK tax system. It builds on the rollout of Making Tax Digital for VAT and aims to modernise the way taxpayers keep records and report income.

If you’re a self-employed individual or landlord, MTD ITSA will require you to:

• Maintain digital accounting records using HMRC-compatible software
• Submit quarterly updates with HMRC, summarising your income and expenses — directly from your records without manual input
• Complete a year-end finalisation to confirm your figures and make any necessary adjustments and prepare and submit your tax return

Manual entry or uploading spreadsheets will no longer be sufficient unless bridging software is used, and digital links are not broken. HMRC’s goal is to ensure that all data flows automatically from digital records to their systems.

When will Making Tax Digital be mandatory for the self-employed and landlords?

MTD for Income Tax will be mandatory, and it will be phased in over several years based on income levels:

• From April 2026: Applies to self-employed individuals and landlords with gross income over £50,000
• From April 2027: Threshold reduces to £30,000
• From April 2028 (expected): Extends to those earning over £20,000

Gross income refers to total turnover or rental income before expenses — not profit.

If you have both self-employment and property income, HMRC will combine these figures to determine if you meet the threshold.

Who is within scope for MTD for Income Tax — and who isn’t?

HMRC is currently writing to those it believes fall within scope. This includes:

• Sole traders with turnover over the threshold
• Landlords with property income above the threshold
• Individuals with combined qualifying income from both sources

However, some groups are not yet required to join:

• Partnerships – MTD ITSA will apply at a later, as yet unconfirmed date
• Non-UK residents or those using the remittance basis (SA109) – deferred until April 2027
• Digitally excluded individuals – may qualify for exemptions on grounds such as disability, age, or internet access, subject to HMRC approval

We can help assess your status and whether any exemptions or deferrals apply to your situation.

What is the best software for Making Tax Digital for Income Tax?

To comply with MTD ITSA, you’ll need HMRC-recognised software that can:

• Keep and store digital records
• Submit quarterly updates automatically
• Complete year-end submissions

Popular solutions already MTD-ready include:

• Xero
• Sage
• Intuit QuickBooks
• Dext
• CCH iFirm MTD for Income Tax

It’s important to understand that your MTD ITSA process may involve more than one piece of software. Some tools are only capable of submitting quarterly updates (known as submission-only or bridging tools), while others manage the full end-to-end process — from digital record-keeping to preparing and filing the final tax declaration. In many cases, the quarterly submissions will feed into your main tax return software, either directly or via HMRC’s systems.

We are certified, authorised partners with the most popular cloud software providers — but unlike many firms, we are not restricted to one solution. This gives us the flexibility to provide unbiased advice, tailored specifically to your business.

Our team will work closely with you to:

• Understand how your business operates
• Assess your needs in line with HMRC’s requirements
• Recommend the right cloud accounting solution for your size, sector, and internal processes

We offer comprehensive cloud accounting services designed to complement your operations. Whether you’re transitioning from manual records or looking to improve your digital systems, we’ll ensure the move to MTD is smooth, efficient, and penalty-free — with no disruption to your day-to-day business.

Connecting MTD for VAT with the new income tax requirements

Making Tax Digital began with VAT. It was first phased in from April 2019 based on turnover thresholds, and by April 2022 all VAT-registered businesses have been required to keep digital records and file returns using compatible software. This initial phase gave HMRC valuable experience with digital reporting and laid the groundwork for what’s now being introduced under MTD for Income Tax.

Many businesses are already familiar with MTD for VAT — and those same systems can often be adapted or extended to handle quarterly Income Tax updates. Combining both VAT and Income Tax reporting within a single cloud accounting platform offers not only compliance but also efficiency: fewer errors, better financial visibility, and real-time reporting across your finances.

If you’re already using MTD-compliant software for VAT, now is a good time to check whether that system also supports the specific requirements of MTD for Income Tax. Not all versions or setups will be suitable straight out of the box — and while both regimes require quarterly submissions, MTD ITSA involves more detailed reporting and a structured year-end finalisation process. We can help you assess whether your current platform is fit for purpose, or whether upgrading to a more comprehensive and scalable solution would better support your business in the long run.

MTD for Income Tax: Why the 2026 deadline will not be delayed again

Unlike past announcements that were delayed or revised, this rollout is now firmly embedded in HMRC’s long-term strategy. The new system is built into HMRC’s Enterprise Tax Management Platform, which underpins its digital future.

MTD ITSA is also key to reducing the UK’s tax gap — estimated to be billions of pounds annually — by minimising common reporting errors. Leading professional bodies such as ICAEW, ATT, and CIOT all support the current roadmap and anticipate no further deferral.

How to prepare for Making Tax Digital for Income Tax – A practical guide

This is more than just a technical change — it’s a complete overhaul of how and when you manage your tax obligations. It will also fundamentally change the way you interact with HMRC, increasing the frequency of your reporting and requiring a more proactive, year-round approach to compliance and accounts preparation.

To prepare, we recommend:

1. Assessing whether your income brings you within scope for the 2026 or 2027 thresholds
2. Working with us to develop a tailored MTD strategy – from software support to full-service filing
3. Choosing compliant software that suits your level of involvement
4. Starting digital record-keeping now to get comfortable with the process
5. Planning for quarterly updates – these are new obligations and will require a regular process

Whether you want a DIY approach or a managed service, we’ll help you find a setup that works for your business.

How we can help you stay compliant with Making Tax Digital

The introduction of MTD ITSA marks a major shift in the UK’s tax reporting landscape. It’s not just about compliance — it’s about transforming your accounting processes, improving accuracy, and gaining better insight into your finances throughout the year.

We’ll be reaching out to clients who fall within scope, but you’re very welcome to get in touch with us in advance. We’ll be in touch to discuss what’s needed in more detail. We can also talk through the options for record keeping and quarterly filing, so you can decide how much input you would like us to have — and how much you want to tackle yourself.

Additionally, for clients who want to maintain their current record-keeping system (e.g., spreadsheets), we offer a bridging software service compliant with HMRC requirements. Bridging products allow you to send quarterly updates without upgrading to full accounting software; simply continue providing your records on a quarterly basis instead of annually. This provides a practical, efficient route to compliance—without disrupting your existing workflow—exactly as recommended by HMRC.

Whether you need help identifying your next steps, selecting the right software, or fully outsourcing your tax reporting — we’re here to support you every step of the way.

Get in touch

Contact us today to book your MTD planning consultation — and ensure you’re ahead of the curve before the changes take effect. so you can decide how much input you would like us to have, and how much you want to tackle yourself. We look forward to working with you to find the MTD IT solution that’s right for you.