From April 2026, Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) will apply to self-employed individuals and landlords where turnover is above £50,000. This means quarterly digital reporting to HMRC using compatible software will become mandatory.
From April 2027, the threshold will reduce to £30,000, bringing many more people into scope.
Will this change impact you?
The MTD for IT regime will become mandatory from 6 April 2026 if your self-employment and/or property rental income is more than £50,000 in the 2024-25 tax year.
What does this mean for you?
You will be required to use what is termed ‘compatible software’ to:
- Keep and retain transaction digital records for each self-employment and/or property business.
- Submit quarterly update reports of your year-to-date transactions for each self-employment and/or property business to HMRC.
- Finalise your end-of-year position by providing details of your other personal income sources, adjusting, claiming reliefs and submitting your digital tax return to HMRC.
- Starting with the 2026-27 tax year, this process will replace your annual self-assessment tax return. Failure to comply with the new rules will result in penalties.
Don’t worry – we’re here to help
We understand that there is a lot to take in, so please get in touch if you have any questions.