Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is a major change to the way certain individuals report their income to HM Revenue & Customs (HMRC). It forms part of the government’s wider Making Tax Digital programme, which aims to modernise the tax system by improving accuracy and moving tax reporting to a fully digital process.
If you are self-employed or receive income from property, MTD for ITSA may apply to you. Understanding the changes early will help avoid confusion and ensure compliance when the rules come into force.
What Is Making Tax Digital for Income Tax Self-Assessment?
MTD for ITSA replaces the traditional annual Self-Assessment tax return with a system of ongoing digital reporting. Instead of submitting one return per year, affected individuals will be required to keep digital records and submit updates to HMRC throughout the tax year using approved software.
This represents a significant shift from the way Income Tax has been reported historically, particularly for those who have previously managed their tax affairs manually or using spreadsheets.
When Will MTD for ITSA Apply?
MTD for ITSA will be introduced in stages:
- From 6 April 2026
Self-employed individuals and landlords with qualifying income over £50,000 - From 6 April 2027
Self-employed individuals and landlords with qualifying income over £30,000 - From 6 April 2028
Further expansion is expected, subject to HMRC confirmation
The phased approach is intended to give taxpayers time to adapt to the new requirements.
What Will Change in Practice?
Under MTD for ITSA, affected individuals will need to:
- keep digital records of income and expenses
- use MTD-compatible software approved by HMRC
- submit quarterly updates summarising income and expenses
- complete an end-of-period statement after the tax year
- submit a final declaration, which replaces the annual Self-Assessment tax return
The quarterly updates are not tax bills. They are summaries designed to provide HMRC with more regular information during the year.
Who Will Be Affected?
MTD for ITSA applies to individuals who are:
- Self-employed
- Landlords
- Earning above the relevant qualifying income thresholds
Some individuals may be exempt, for example where digital exclusion applies. HMRC will provide guidance on exemptions and how to apply.
If you’re unsure whether the rules apply to your business or rental income, you can check your status directly with HMRC:
Find out if and when you need to use Making Tax Digital for Income Tax
Why Is This Change Being Introduced?
The aim of MTD for ITSA is to reduce errors caused by manual record-keeping and improve transparency. By keeping digital records and reporting more frequently, individuals should have a clearer understanding of their income and tax position throughout the year, rather than relying on a single annual submission.
What Should You Do Next?
If you think MTD for ITSA may apply to you, now is a good time to review how you currently keep your records and whether your systems will meet the new requirements.
If you would like help understanding how MTD for ITSA affects you, or support with preparing for the change ahead of the 6 April 2026 deadline, speaking to a professional adviser can provide clarity and reassurance. Getting the right advice early can help ensure a smooth transition and ongoing compliance when the new rules come into force.
