MTD ITSA is coming
Founder, Lean Ledger Ltd
Making Tax Digital for Income Tax arrives in April 2026, requiring sole traders and landlords earning above £50,000 to file quarterly digital returns, yet nearly half of those affected have never heard of it. With thresholds falling to £20,000 by 2028 and most sole traders not yet using cloud software, the time to act is now rather than waiting for a letter that may arrive too late.
The biggest change to UK tax filing in nearly 30 years is coming in April, and nearly half of those affected have never heard of it.
Making Tax Digital for Income Tax is finally happening. If you're a sole trader or landlord who earned more than £50,000 in 2024-25 from self-employment or property income, you'll need to start keeping digital records and reporting your income and expenses to HMRC quarterly using approved software.
This isn't based on profit, by the way — it's gross income. That catches people out, especially landlords who receive rent through an agent and are used to thinking in net figures.
The threshold drops to £30,000 from April 2027, and £20,000 from April 2028. So even if you're not in scope yet, you will be.
Quarterly submission deadlines are August 7, November 7, February 7 and May 7, with a final declaration still due by January 31. Tax payment dates don't change.
HMRC has been sending letters to affected taxpayers, but not everyone will receive one before April. The ICAEW has warned that some letters won't arrive until people are already required to keep digital records. So waiting for a letter isn't a plan.
If you think you might be affected, here's what to do now: work out your qualifying gross income for 2024-25, use HMRC's checking tool to confirm, choose compatible software from the approved list, and sign up for MTD.
One thing worth knowing — HMRC has waived penalties for late quarterly submissions during 2026-27. So there's a grace period. But getting set up early means you won't be scrambling when the first deadline hits in August.
Only 1 in 10 sole traders currently use cloud accounting software. That means most people affected by this will need to adopt new tools and new habits. If you're not sure where to start, or you'd rather someone handle this for you, that's exactly what I do.