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

We previously said MTD for Income Tax Self Assessment will be a big change…” — and six months on, it really is! With April 2026 fast approaching, now’s a great time to check how things have progressed and what self-employed folks and landlords actually need to know right now.



The Roll-Out Is Still Phased — But It’s Happening

The phased timetable that HMRC set out remains in place:

• From 6 April 2026 — anyone with qualifying self-employment or property income over £50,000 must use MTD for ITSA.
• From 6 April 2027 — the threshold drops to £30,000.
• From 6 April 2028 — it’s planned to drop further to £20,000.

So the rollout hasn’t changed — but people are starting to wake up to it as the first deadline gets closer.

Awareness Is Still Surprisingly Low

Recent expert commentary suggests that a lot of self-employed taxpayers and landlords still don’t realise this applies to them — even with less than 3 months to go.

That means there’s still time — but not much — to take action and avoid last-minute scrambling or penalties.

Quarterly Digital Updates Are the New Normal

When MTD for ITSA kicks in for you:

• You’ll keep digital records of income & expenses.
• You’ll send quarterly updates to HMRC through compatible software.
• You’ll finish with a final declaration after the tax year ends.

This replaces the old single yearly Self Assessment return for income that qualifies.

(Yes — five submissions a year instead of one… trust us, several people have already called this the “tax marathon!”)

HMRC Is Starting to Write to Affected Taxpayers

From late 2025 onwards, HMRC has been sending letters to customers whose income last year suggests they’ll be mandated to join MTD from April 2026.

If you’ve had one of those letters and haven’t done anything yet — now really is the time.

Software and Testing Are Live

Compatible software for MTD for ITSA already exists, and:

• HMRC’s public testing programmes are underway.
• Some service providers offer free or low-cost MTD tools.
• HMRC has updated APIs and guidance for developers and agents.

This means there’s no excuse to wait until April to explore software — you can test it now and build confidence with your systems.

Penalties Still Apply — But HMRC Is Being Realistic

Experts have pointed out that HMRC has said it will be lenient on penalties in the first year of quarterly filings (2026-27), recognising that the transition may be bumpy for many.

Still — better to be ready on time than rely on leniency.

So What Should You Do in 2026?

Here’s your quick checklist:

✔️ Check Your Income Threshold

Look at your last tax return — if your combined self-employment and property income is above £50k, MTD is mandatory from 6 April 2026.

✔️ Choose Digital Software Now

Don’t wait until April! Pick an HMRC-approved program and familiarise yourself with it.

✔️ Sign Up Early

Even though HMRC sends reminders, it’s best to register ahead of time so you aren’t rushed in March/April.

✔️ Get Organised

Start recording income and expenses digitally now if you’re not already — that will make quarterly filings much smoother.

Need Support? Get in touch with us and our experts will help you act early — not only to stay compliant but to make the new system work for you rather than against you.