Making Tax Digital for Income Tax Self Assessment (MTD ITSA) became mandatory in April 2026 for sole traders and landlords with qualifying income over £50,000. It's the biggest change to Self-Assessment since the system went online — and it replaces one annual tax return with five submissions a year.
Who is affected, and when
| Qualifying income | Mandated from |
|---|---|
| Over £50,000 | April 2026 (now live) |
| Over £30,000 | April 2027 |
| Over £20,000 | April 2028 (announced) |
"Qualifying income" means your gross self-employment and property income combined — before expenses. If you invoice £55,000 but your profit is £38,000, you're still in scope from April 2026.
What actually changes
Under MTD ITSA you must:
- Keep digital records of business income and expenses — paper ledgers and ad-hoc spreadsheets no longer qualify on their own.
- Send quarterly updates to HMRC through MTD-compatible software, summarising income and expenses for each three-month period.
- Submit a final declaration by 31 January, replacing the old Self-Assessment return.
The quarterly deadlines
| Quarter | Period covered | Deadline |
|---|---|---|
| Q1 | 6 Apr – 5 Jul | 7 August |
| Q2 | 6 Jul – 5 Oct | 7 November |
| Q3 | 6 Oct – 5 Jan | 7 February |
| Q4 | 6 Jan – 5 Apr | 7 May |
Miss a deadline and you collect penalty points — four points triggers a £200 fine, and the points keep accruing for every late submission after that.
What you should do this quarter
- Check your qualifying income for the 2024/25 tax year — that's what HMRC used to decide if you're mandated from April 2026.
- Move your records into software now, not the week before the 7 August deadline. Digital record-keeping is the part most sole traders underestimate.
- Connect your CSV/Excel import so income and expenses are kept organised — this removes 90% of the quarterly admin.
- Talk to your accountant about who presses "submit" each quarter. Many accountants charge per submission, so clean books cut your bill four times a year.
How Ledgerly Pro fits in
Ledgerly Pro keeps your digital records MTD-ready out of the box: CSV/Excel import transactions automatically, AI bookkeeping categorises them, and your quarterly income and expense totals are always one click away for you or your accountant. See pricing — plans start at £9.99/month — or start a free trial and try all features free for 30 days.
