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.
- Prepare and submit your tax return through compatible software by the normal deadline, including any adjustments, allowances and other income.
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 |
HMRC uses a points-based late-submission penalty system. The rules depend on the obligation and circumstances, so check the current HMRC guidance rather than relying on a fixed rule of thumb.
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 LedgerlyPro fits in
LedgerlyPro helps you organise digital records: upload CSV/Excel statements, review AI category suggestions and keep income and expense totals ready for you or your accountant. LedgerlyPro does not currently submit MTD for Income Tax updates to HMRC, so confirm your filing route with compatible software or your accountant. See pricing — Premium is £9.99/month — or start a free trial and try all features free for 30 days.
