Records become digital and continuous
You keep your income and expenses in software or a spreadsheet, updated as you go, not reconstructed from a shoebox the night before the deadline. A spreadsheet is a valid digital record.
The short version
From 6 April 2026, UK sole traders and landlords with qualifying income over £50,000 must keep digital records and submit to HMRC four times a year, plus one annual confirmation. It's called Making Tax Digital for Income Tax, or MTD for ITSA.
HMRC permits a spreadsheet plus bridging software. Every accounting brand will still try to sell you a monthly subscription. You don't need one. This page explains what's actually changing.
What actually changes
Three things are different.
The annual Self Assessment rhythm is replaced. Here's the shape of the new one.
You submit four times a year
Four cumulative year-to-date updates, due 7 August, 7 November, 7 February and 7 May. These are running totals, not full tax returns, and you correct earlier numbers by overwriting them.
One annual confirmation replaces the SA return
The Final Declaration, due 31 January, confirms your year and adds any other income such as savings or dividends. It's the new Self Assessment, just confirmed after HMRC already has your quarterly totals.
Who it hits
It's the combined income test that catches people.
Qualifying income
Self-employment plus property income, added together.
MTD looks at your gross self-employment income and your gross property income combined, before expenses. Even if neither alone hits the threshold, the sum can. That's what pulls in side-hustle freelancers with a single rental, and landlords with a bit of consulting on the side.
£38kFreelance income
£14kProperty income
£52kCombined — you're in
When it starts
Three threshold phases. Find yours.
The mandate rolls down by income band over three tax years.
6 Apr 2026
£50k+ qualifying income
Sole traders and landlords with combined gross income over £50,000 in the 2024 to 25 tax year. First quarterly update due 7 August 2026.
6 Apr 2027
£30k+ qualifying income
The threshold drops. Sole traders and landlords with combined gross income over £30,000 join the regime.
6 Apr 2028
£20k+ qualifying income
The lower-threshold expansion. Voluntary sign-up is open before then if you want the practice.
The spreadsheet path
Keep your spreadsheet. Keep your money.
HMRC permits a spreadsheet plus bridging software. The Sole Trader Tax Workspace is the MTD-ready workbook: quarterly cumulative totals shaped exactly as HMRC wants them, a bridging-software shortlist, the quarterly checklist, and a deadline calendar. Paid once, yours to keep.
Free tools, no email gate
Work out where you stand right now.
Free reference
MTD Jargon Decoder
Twelve cards. Qualifying income, cumulative update, Final Declaration, bridging software, in plain English with a worked example each.
Open the decoder
Free tool
The MTD Penalty Clock
How close are you to the next penalty point, and what four points cost. A live counter you can screenshot and share.
Open the clock
Free PDF
MTD for ITSA Survival Kit
One double-sided A4 page: your Q1 deadline plus a seven-step action list. No email gate. Print and stick on the fridge.
Get the PDF
Common questions
MTD, answered.
Can I really do MTD with a spreadsheet?
Yes. HMRC officially permits spreadsheet plus bridging software. The bridging software is what connects your spreadsheet to HMRC's submission API. There are free bridging tools and one-time-paid ones from about £15 to £30. The Sole Trader Tax Workspace includes a shortlist.
Do I really need to submit four times a year?
Yes, if your qualifying income is over the threshold for your phase. The quarterly updates are cumulative year-to-date totals, not full tax returns. The full return, the Final Declaration, is still annual.
What happens if I miss a quarterly update?
Penalty points. Each missed submission earns a point. Hit four points and you get a £200 fine. Points expire after 24 months of clean submissions. The Penalty Clock shows the dramatic version.
Will incorporating to a Ltd company avoid MTD?
Not really. Companies have their own MTD regime arriving later, and incorporation carries its own administrative overhead. It's rarely worth doing purely to dodge quarterly updates.
Is there a soft-landing grace period in year one?
No. Unlike MTD for VAT in 2019, there's no penalty-free soft-landing window for MTD for Income Tax. The penalty regime applies from the first deadline, so the first quarterly update on 7 August 2026 counts.
Sources: GOV.UK Making Tax Digital for Income Tax collection, HMRC penalty reform guidance, ICAEW TAXguide 01/25. Last reviewed May 2026. General information, not personalised tax advice. For complex situations consult a qualified accountant or tax adviser.