Keep Digital Records
Use HMRC-compatible software to record income and expenses (not spreadsheets alone).
Overview
Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) is HMRC’s next step in modernising the tax system. If you’re self-employed or a landlord, you’ll move from one annual return to keeping digital records and sending quarterly updates. The phased rollout starts in April 2026.
What is MTD for Income Tax?
MTD is designed to make tax simpler and more accurate. Instead of collecting a year’s paperwork at once, you’ll keep digital records as you go and submit information regularly. This reduces errors and keeps your tax position clearer throughout the year.
Who Will Be Affected?
MTD for ITSA becomes mandatory based on combined self-employment and property income:
| Tax Year Start | Who Must Join | Income Threshold |
|---|---|---|
| 6 April 2026 | First wave | Over £50,000 |
| 6 April 2027 | Second wave | Over £30,000 |
| Planned from April 2028 | Third wave | Over £20,000 |
* If your qualifying income is £20,000 or below, you will not need to use MTD. Individuals who cannot use digital tools due to age, disability, or remote location can apply for a digital exclusion exemption.
Key Requirements Under MTD
Send Quarterly Updates
Submit a summary every three months. Deadlines fall on the 7th of the month after each quarter (e.g., quarter ending 5 July → submit by 7 August).
Final Declaration
At year end, submit a Final Declaration (replaces the Self Assessment return) with adjustments, allowances and reliefs.
Timeline at a Glance
2026: £50k+ 2027: £30k+ 2028 (planned): £20k+
The phased approach gives smaller businesses more time to prepare.
How to Prepare Now
- Check which year your income places you into.
- Choose MTD-compatible accounting software.
- Begin keeping your records digitally.
- Get familiar with quarterly submissions.
How WIT Accounting Can Help
- Set you up with HMRC-recognised software.
- Handle your quarterly submissions.
- Manage your Final Declaration.
- Keep you compliant, organised and penalty-free.
- Remove the admin stress so you can focus on your business.