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Making Tax Digital for Self Assessment: The Complete UK Guide
Making Tax Digital for Self Assessment is no longer a future consideration it is happening now. From April 2026, HMRC has fundamentally changed how self-employed individuals and landlords report their income. If you earn above the qualifying threshold and have not yet taken action, the clock is ticking.
This guide explains everything you need to know about MTD for Self Assessment: what it is, who it affects, how it works, and what you must do to remain compliant.
Making Tax Digital for Income Tax Self Assessment changes more than the method used to file information with HMRC. For taxpayers within scope, it introduces an ongoing reporting process built around digital record-keeping and quarterly updates throughout the tax year.
Making Tax Digital for Self Assessment: Who Must Comply and How It Works
Making Tax Digital for Self Assessment changes how eligible sole traders and landlords report income and expenses to HMRC. Instead of relying only on an annual tax return, affected taxpayers must maintain digital records, submit quarterly updates using compatible software and complete an annual Income Tax return.
MTD for Self Assessment, officially known as Making Tax Digital for Income Tax, became mandatory from 6 April 2026 for eligible individuals with qualifying income above £50,000. The requirements will extend to more taxpayers as the income threshold reduces.
Whether you are self-employed, receive rental income or have both income sources, understanding your MTD obligations is essential for meeting HMRC’s reporting requirements.
This guide explains who must register, the qualifying income thresholds, quarterly reporting, compatible software, exemptions and the steps needed to remain compliant. If you need help putting these requirements into practice, our Making Tax Digital support in London covers digital records, software workflows and reporting arrangements.
What Is Making Tax Digital for Self Assessment?
Making Tax Digital for Self Assessment (MTD for ITSA) is HMRC’s initiative to replace the traditional annual Self Assessment tax return with a fully digital, quarterly reporting system. Rather than filing one return each January, eligible taxpayers are now required to maintain digital records throughout the year and submit four quarterly updates to HMRC using approved software.
The goal is to modernise the UK tax system, reduce errors caused by manual data entry, and give both taxpayers and HMRC a more accurate, real-time view of income and tax liability.
MTD for ITSA is the latest phase of the wider Making Tax Digital programme, which began in April 2019 for VAT-registered businesses above the VAT threshold and was extended to all VAT-registered businesses from April 2022.
For sole traders and landlords, MTD for Income Tax means that bookkeeping can no longer be treated solely as a year-end exercise. Those required to join need to maintain the relevant records digitally throughout the year so that their quarterly updates can be prepared from current information.
For a comprehensive overview of how the entire Making Tax Digital programme is structured across all tax types and phases, read our complete MTD for Income Tax 2025/26 guide.
Who Does MTD for Self Assessment Apply To?
MTD for ITSA is being rolled out in phases, based on gross income from self-employment and/or property rental:
- From April 2026 – Sole traders and landlords with qualifying income above £50,000 per year must comply. HMRC used 2024/25 Self Assessment returns (filed by 31 January 2026) to identify who falls into this first wave.
- From April 2027 – The threshold drops to £30,000, bringing a second wave of sole traders and landlords into scope.
- From April 2028 – The threshold will reduce further to £20,000, as confirmed by Chancellor Rachel Reeves in the Spring Statement of March 2025.
Partnerships will be required to join at a later date, which HMRC has confirmed will be announced in due course.
This phased approach means that MTD for Self Assessment does not begin for every taxpayer at the same time. Sole traders and landlords should establish their qualifying income and mandatory start date rather than assuming that their existing Self Assessment filing arrangements can continue unchanged.
Who Needs to Use Making Tax Digital for Self Assessment?
Making Tax Digital for Self Assessment applies to eligible sole traders and landlords who report self-employment or property income through Self Assessment.
The requirements are being introduced according to qualifying income.
| Start date | Qualifying income | Assessment tax year |
|---|---|---|
| 6 April 2026 | More than £50,000 | 2024/25 |
| 6 April 2027 | More than £30,000 | 2025/26 |
| 6 April 2028 | More than £20,000 | 2026/27 |
What Counts as Qualifying Income for MTD?
Qualifying income is generally the combined gross income from self-employment and property before expenses are deducted.
For example:
- Self-employment turnover: £28,000
- Gross rental income: £25,000
- Combined qualifying income: £53,000
In this example, the individual exceeds the £50,000 threshold, even though neither income source exceeds that amount individually.
Employment income, dividends and savings interest are not included when calculating this qualifying income threshold, although they may still need to be reported in the annual tax return.
Does MTD Apply If You Are Not VAT Registered?
Yes, potentially. Making Tax Digital for Income Tax and Making Tax Digital for VAT are separate obligations.
A sole trader or landlord may need to use MTD for Self Assessment even if they are not VAT registered, provided they meet the Income Tax eligibility requirements and are not exempt.
Partnerships are not included in the current mandatory rollout for individual sole traders and landlords. HMRC will announce their timetable separately.
Important: How HMRC Determines Your Eligibility
HMRC looks at your gross income from self-employment and property not your profit. This catches many taxpayers off guard. For a full breakdown of what counts as qualifying income for MTD purposes and how different income sources are treated, read our dedicated guide on MTD qualifying income.
If HMRC identified you as being in scope based on your 2024/25 return, you should have received a notification letter. However, if your income exceeded the threshold and you did not receive a letter, you are still legally required to comply from April 2026.
For taxpayers with more than one source of self-employment or property income, determining whether MTD for Income Tax applies requires looking at the relevant qualifying income together. This makes checking your position particularly important where no single trade or property source exceeds the threshold on its own.
How Does MTD for Income Tax Self Assessment Work?
Under MTD for ITSA, the single annual Self Assessment tax return is replaced by a structured, five-submission process across the tax year:
MTD for Self Assessment Quarterly Reporting Explained
Eligible taxpayers must submit four quarterly updates through compatible software and complete an annual Income Tax return.
The standard MTD reporting dates are:
| Reporting period | Submission deadline |
|---|---|
| 6 April to 5 July | 7 August |
| 6 April to 5 October | 7 November |
| 6 April to 5 January | 7 February |
| 6 April to 5 April | 7 May |
Important: MTD quarterly updates are cumulative. The second update includes information from 6 April to 5 October, rather than covering only the second three-month period.
Taxpayers using calendar reporting periods follow different period-end dates but the same four submission deadlines.
Does Making Tax Digital Mean Paying Tax Quarterly?
No. Quarterly updates report income and expenses to HMRC. They do not create a new quarterly Income Tax payment obligation. The existing Income Tax payment timetable continues to apply, including relevant payments on account and balancing payments.
Do You Still Submit an Annual Self Assessment Tax Return?
Yes. MTD changes the filing method and introduces quarterly reporting, but it does not remove the annual Income Tax return requirement.
For taxpayers who entered MTD on 6 April 2026:
- The 2025/26 Self Assessment return is due by 31 January 2027
- The first annual return covering the 2026/27 MTD reporting year is due by 31 January 2028
The annual return includes relevant adjustments, allowances, reliefs and other taxable income that may not be included in quarterly updates. Our MTD Self Assessment support in London can help you coordinate digital records, quarterly updates and your annual tax return.
How to Register for Making Tax Digital for Self Assessment
If you meet the qualifying income threshold, you should check your MTD registration status and prepare your accounting records.
Step 1: Check Whether MTD Applies
Review your qualifying self-employment and property income against the threshold for your relevant start year.
Step 2: Check Your HMRC Registration Status
Sign in to HMRC online services to determine whether you have already been signed up.
Since September 2026, HMRC has been signing up some taxpayers who were required to join from April 2026 but had not registered themselves. If you have not been signed up, you can still register or ask your accountant to do so.
Step 3: Set Up Compatible Software
Choose software that supports MTD for Income Tax. Check that it can maintain the necessary digital records and submit your quarterly updates and annual return.
Step 4: Confirm Your Income Sources
Check that your self-employment and property income sources are correctly recorded in HMRC’s service and your accounting software.
Step 5: Maintain Digital Records and Submit Updates
Keep your income and expenses up to date throughout the year, reconcile your records and submit the relevant quarterly updates.
Already missed your first MTD update? Bring your digital records up to date and submit the overdue information as soon as possible. The obligation to report still applies even where first-year late-submission penalty relief is available.
For a detailed breakdown of exactly what is required from April 2026 including how to sign up, what records must be kept digitally, and how the submission process works in practice read our dedicated guide on what is required from April 2026 for MTD Income Tax.
HMRC-Approved Software for Making Tax Digital
One of the core requirements of MTD for ITSA is the use of software that is compatible with HMRC’s systems. You cannot submit quarterly updates through HMRC’s existing online Self Assessment portal or by paper. The submission must come from approved software.
HMRC maintains a list of compatible software products. These range from full accounting platforms to simpler bridging tools. Popular options include:
- Xero – A cloud-based accounting platform widely used by sole traders and small businesses
- QuickBooks – Supports digital record-keeping and direct HMRC submission
- Zoho Books – An HMRC-recognised MTD-compatible platform suitable for self-employed individuals and landlords, supporting bank reconciliation and direct quarterly submissions
- FreeAgent – Designed specifically for freelancers and small businesses
When choosing software, consider your level of accounting knowledge, the volume of transactions you process, and whether you work with an accountant who may have a preferred platform. Before making that decision, it is worth taking a step back to assess your overall MTD readiness – our practical guide on whether you are ready for Making Tax Digital for Income Tax walks through all the key areas you need to have in place before your obligations begin.
The software should also fit the way you actually maintain your business or property records. Preparing for MTD for Income Tax is not simply a matter of obtaining compatible software; the system needs to support consistent digital record-keeping throughout the tax year.
What Are the Penalties for Missing MTD Self Assessment Deadlines?
HMRC uses a points-based system for late submissions under Making Tax Digital for Income Tax. However, there is an important distinction between quarterly updates, annual tax returns and tax payments.
Penalties for Late Quarterly Updates
HMRC will not apply late-submission penalty points for quarterly updates relating to the 2026/27 tax year.
This first-year concession allows affected taxpayers additional time to adjust to the new reporting system. It does not remove the obligation to maintain digital records and complete quarterly submissions.
For later tax years, missing a quarterly update deadline can result in a penalty point. For taxpayers required to submit quarterly updates, reaching four penalty points triggers a £200 penalty, with further penalties possible for subsequent missed deadlines.
Penalties for Late Annual Returns
The first-year concession does not apply to late annual Income Tax returns. Taxpayers must still submit their annual return by the relevant 31 January deadline.
Penalties for Late Tax Payments
Late Income Tax payments are treated separately from quarterly reporting failures. Penalties and interest may apply where tax remains unpaid after the relevant due date.
Maintaining accurate digital records and reviewing submission dates throughout the year can reduce the risk of missed obligations.
Making Tax Digital and Online Sellers
If you earn income through selling goods or services online whether through marketplaces such as eBay or Etsy, freelance platforms, or your own website your income may be subject to both Self Assessment and MTD for ITSA requirements.
From January 2024, online platforms operating in the UK are legally required to report seller income to HMRC, including the number of transactions, total income received, and seller identification details. This means HMRC may already hold data on your online trading activity before you file or register.
Key thresholds to be aware of:
- The Trading Allowance allows up to £1,000 of trading or miscellaneous income per tax year without registering for Self Assessment
- Once income exceeds £1,000, Self Assessment registration is required regardless of profit
- If gross income from all self-employment and/or property sources exceeds the MTD threshold, quarterly digital reporting is also required
Where online selling forms part of a wider self-employment activity, the relevant income may therefore contribute towards determining whether MTD for Income Tax applies. The MTD threshold should not be considered solely by reference to one marketplace or individual source of trading income.
Exemptions from MTD for Self Assessment
Not everyone within the income thresholds will be required to comply. HMRC recognises certain categories of exemption, including:
- Digital exclusion – Individuals who are unable to use digital tools due to disability, age, or lack of internet access
- Insolvency – Those subject to certain insolvency procedures
- Religious grounds – Where digital reporting conflicts with genuine religious beliefs
- Non-residents using SA109 – There is a deferral for certain non-resident taxpayers who file the SA109 form, pending further clarification from HMRC
If you believe you qualify for an exemption, you must notify HMRC and satisfy their requirements. Exemption is not automatic.
MTD for Self Assessment: Key Dates at a Glance
The following dates are particularly important for sole traders and landlords preparing for Making Tax Digital for Income Tax.
| Date | MTD requirement |
|---|---|
| 6 April 2026 | Mandatory MTD begins for qualifying income above £50,000 |
| 7 August | First quarterly update deadline |
| 7 November | Second quarterly update deadline |
| 7 February | Third quarterly update deadline |
| 7 May | Fourth quarterly update deadline |
| 6 April 2027 | MTD extends to qualifying income above £30,000 |
| 6 April 2028 | MTD extends to qualifying income above £20,000 |
| 31 January | Annual Income Tax return and relevant tax payment deadline |
The four quarterly reporting deadlines recur each reporting year. Your first compulsory reporting year depends on when your qualifying income brings you within MTD.
If you were required to join MTD in April 2026, the next quarterly update deadline is 7 November 2026. Check that your digital records and compatible software are ready before submitting.
Taxpayers who have not yet prepared their digital records should review their position promptly, even if HMRC has not issued a reminder.
Case Study: Moving a Landlord From Annual Self Assessment to MTD
Rachel approached our Farringdon office after learning that her rental and self-employment income brought her within Making Tax Digital for Self Assessment. She had previously provided her property records to her accountant once a year and was concerned about moving from annual reporting to digital records and quarterly updates.
Cigma Accounting reviewed Rachel’s qualifying income and confirmed the MTD requirements that applied to her. We then assessed how she recorded rent, property expenses and self-employment transactions and helped her establish a digital bookkeeping process using compatible accounting software.
Rather than waiting until the end of the tax year, Rachel began updating her records regularly so the information required for the 7 August, 7 November, 7 February and 7 May quarterly deadlines could be prepared from current records. We also explained how the final declaration fits into the annual reporting cycle.
As part of the wider review, Cigma Accounting considered Rachel’s property tax, bookkeeping, Self Assessment and personal tax planning requirements. This helped ensure that her MTD setup supported her complete tax position rather than focusing only on quarterly submissions.
Rachel entered the new reporting system with organised digital records, suitable software and a clear timetable for completing her quarterly and year-end responsibilities.
MAKE THE MOVE FROM SELF ASSESSMENT TO MTD WITH CONFIDENCE
Moving from annual Self Assessment to quarterly digital reporting? Cigma Accounting can review your qualifying income, bookkeeping and software setup to help you meet your ongoing MTD requirements.
Expert accountants in London providing practical tax advice for businesses and individuals.
Making Tax Digital for Self Assessment Support in London With Cigma Accounting
The introduction of Making Tax Digital for Self Assessment changes how affected sole traders and landlords manage their Income Tax records and reporting. Instead of relying solely on the traditional annual Self Assessment process, taxpayers within scope must maintain digital records and provide quarterly updates through compatible software. Cigma Accounting supports taxpayers across Fulham Broadway, including Parsons Green and Walham Green, helping them understand the transition and establish reliable accounting processes.
Preparing for MTD for Self Assessment means understanding when the rules apply, what records must be maintained digitally and how quarterly reporting fits alongside year-end tax obligations. We help clients navigate Making Tax Digital for Income Tax Self Assessment, establish suitable bookkeeping systems and understand their ongoing MTD for Income Tax responsibilities. Through our offices across London, Cigma Accounting provides practical accounting support to help taxpayers meet HMRC requirements, avoid reporting errors and keep their tax affairs organised throughout the year.
Making Tax Digital for Self Assessment FAQs: Thresholds, Deadlines and Quarterly Updates
What is Making Tax Digital for Self Assessment?
Making Tax Digital for Self Assessment refers to the new digital reporting requirements for certain individuals with self-employment or property income. Under MTD for Income Tax, affected taxpayers must use compatible software to maintain digital records, submit quarterly updates and complete their tax return through compatible software.
Who needs to use Making Tax Digital for Income Tax from April 2026?
From 6 April 2026, an individual generally needs to use MTD for Income Tax if they are registered for Self Assessment, receive income from self-employment or property, and had qualifying income over £50,000 in the 2024/25 tax year.
What counts as qualifying income for MTD for Income Tax?
Qualifying income is broadly the gross income before expenses and tax from self-employment and property. Where someone has both types of income, HMRC considers the combined qualifying income when determining whether the relevant MTD threshold has been exceeded.
Do I still submit a Self Assessment tax return under MTD?
Yes. MTD changes how affected taxpayers maintain and report their records during the year, but it does not remove the year-end tax return requirement. HMRC’s current system requires taxpayers to send quarterly updates and then prepare and submit their tax return through compatible software by the normal 31 January deadline.
How often do I need to send MTD quarterly updates?
You must send four quarterly updates during the tax year. For standard update periods, the deadlines are 7 August, 7 November, 7 February and 7 May. Each update is cumulative, covering the period from the beginning of the tax year to the end of that update period.
Can I be exempt from Making Tax Digital for Income Tax?
Some taxpayers are automatically exempt in specified circumstances, while others may be able to apply for an exemption. HMRC has detailed rules covering exemptions, so taxpayers should not assume that being unable or unwilling to use accounting software automatically removes the MTD requirement.
Move From Annual Self Assessment to MTD With Confidence
Making Tax Digital changes how affected sole traders and landlords manage Self Assessment, introducing digital record keeping and quarterly reporting. Cigma Accounting helps taxpayers understand when MTD applies, establish suitable accounting processes and meet ongoing HMRC requirements without unnecessary compliance risk.
Trusted guidance from London-based accountants, focused on accuracy, clarity, and compliance.
