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Making Tax Digital for Income Tax (MTD for ITSA): who, when and what to do

Last updated: · Prices checked on vendor sites on 31 October 2026

Making Tax Digital for Income Tax (MTD for ITSA) means sole traders and landlords keep digital records and send HMRC quarterly updates through software. It started on 6 April 2026 for qualifying income over £50,000, extends to over £30,000 from April 2027 and over £20,000 from April 2028.

Do you need MTD for ITSA? The thresholds

HMRC looks at your qualifying income: your total self-employment and property income before expenses, taken from an earlier tax return.

MTD for ITSA qualifying income thresholds and start dates
Qualifying income overBased on your return forYou must use MTD for ITSA from
£50,0002024 to 2025 tax year6 April 2026
£30,0002025 to 2026 tax year6 April 2027
£20,0002026 to 2027 tax year6 April 2028
£20,000 or less—Automatically exempt

Source: GOV.UK, “Find out if and when you need to use Making Tax Digital for Income Tax”, updated 26 March 2026.

Not counted: employment (PAYE) pay, your share of partnership profit, dividends, the State Pension and private pensions. Partnerships do not currently need to use MTD for ITSA. You must also be registered for Self Assessment and have filed a return in the last 2 years.

Quarterly update deadlines

With standard update periods, every quarter starts on 6 April and each update covers the tax year so far:

If your accounting period runs 1 April to 31 March, GOV.UK says you should use calendar update periods; the deadlines stay the same. Your tax return and any tax owed are due by 31 January after the tax year ends.

Key dates timeline

  1. 6 April 2026 — MTD for ITSA starts for qualifying income over £50,000.
  2. 7 August 2026 — first quarterly update deadline.
  3. September 2026 — HMRC starts signing up people who need MTD for ITSA for 2026 to 2027 but have not signed up.
  4. 2026 to 2027 tax year — no penalty points for late quarterly updates; tax return penalties still apply.
  5. 6 April 2027 — threshold drops to £30,000.
  6. 31 January 2028 — tax return for 2026 to 2027 due through your software.
  7. 6 April 2028 — threshold drops to £20,000.

Penalties after the first year

From the 2027 to 2028 tax year, each missed quarterly update deadline earns a penalty point. At 4 points you get a £200 penalty, then another £200 each time you miss a further deadline.

What to do next

  1. Landlords: only your share of the gross rent counts. Use theMaking Tax Digital for landlords guide, thenMTD software for landlords.
  2. Work out your qualifying income on GOV.UK or with your accountant.
  3. Pick software: use our 3-question picker, the HMRC-recognised software list, or bridging software if you keep a spreadsheet.
  4. Comparing the two best-known apps? Read FreeAgent vs Xero.
  5. Follow HMRC's official sign-up steps.

Software that fits most people

  • Cheapest: My Tax Digital. Free and HMRC-recognised for all three income sources.Visit My Tax Digital
  • Best value for landlords: Xero. Simple plan £7 a month excl. VAT. HMRC’s finder lists foreign property as Ready now.Visit Xero
  • Best for sole traders: FreeAgent. £19 a month excl. VAT with VAT and payroll; free for some bank customers.Visit FreeAgent

Sources (GOV.UK)

  1. Find out if and when you need to use Making Tax Digital for Income TaxSource: GOV.UK, published , updated
  2. Work out your qualifying income for Making Tax Digital for Income TaxSource: GOV.UK, published , updated
  3. Use Making Tax Digital for Income Tax: send quarterly updatesSource: GOV.UK, published , updated
  4. Penalties for Making Tax Digital for Income TaxSource: GOV.UK, published , updated
  5. Find out if you can get an exemption from Making Tax Digital for Income TaxSource: GOV.UK, published , updated
  6. Sign up for Making Tax Digital for Income TaxSource: GOV.UK, published , updated

Frequently asked questions

When did MTD for ITSA start?

MTD for ITSA started on 6 April 2026 for sole traders and landlords whose qualifying income was over £50,000 in the 2024 to 2025 tax year. The threshold falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028.

What counts as qualifying income?

Qualifying income is your total self-employment and property income before expenses, based on your previous tax return. Employment (PAYE) pay, partnership profit share, dividends, the State Pension and private pensions do not count.

What are the MTD for ITSA quarterly deadlines?

Using standard update periods, the deadlines are 7 August, 7 November, 7 February and 7 May. Each update covers the tax year so far, starting on 6 April.

Are there penalties for late quarterly updates in the first year?

GOV.UK says there are no penalties for missing a quarterly update deadline in the 2026 to 2027 tax year. After that, each missed deadline earns a point and reaching 4 points triggers a £200 penalty.

Who is exempt from MTD for ITSA?

You are automatically exempt if your qualifying income is £20,000 or less. Partnerships do not currently need to use it, and you can apply for an exemption if you are digitally excluded.