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MTD for Income Tax is mandatory from 6 April 2026 for income over £50,000.

Act now — we can help
QUARTERLY UPDATE
HMRC · Making Tax Digital

MTD for Income Tax — what it means for you.

Sole Traders Landlords Self Assessment

Making Tax Digital for Income Tax (MTD for ITSA) is HMRC's new system for reporting Self Assessment income. At Oval Accountants, we help clients get ready in a calm, practical way.

Check your position What changes?
HMRC SUBMISSION Q1 Q2 Q3 Q4
What is it?

A new way of reporting income to HMRC — not a new tax.

MTD for Income Tax focuses on sole traders and landlords who report income through Self Assessment. Instead of one annual return, you'll keep digital records and send quarterly summaries to HMRC — with a final year-end submission to confirm everything.

It does not automatically mean you pay tax more often. The main payment deadline remains after the end of the tax year.

Official HMRC overview
Rollout phases

Who needs to join, and when.

MTD for Income Tax is being introduced in phases based on your qualifying income — broadly, income from self-employment and property.

6 April 2026
Income over £50,000

Sole traders and landlords with qualifying income above £50,000 must be using MTD for Income Tax from this date.

Mandatory now
6 April 2027
Income over £30,000

The second wave brings in those earning above £30,000 from self-employment or property.

Coming next
By end of
Parliament
Income over £20,000

HMRC has confirmed those above £20,000 will be brought in by the end of this Parliament. Exact date to be confirmed in legislation.

TBC

Practical note: You don't need to start using MTD for Income Tax until after you've submitted your first Self Assessment tax return. Not sure if you're mandated? Use HMRC's check tool

What actually changes

Four areas that affect you.

For most people, the changes fall into four practical areas. None of them are as complex as they sound — especially if you have a good accountant alongside you.

01 — Records

Digital record keeping

You'll need to keep digital records of your self-employment and/or property income and expenses. In practice this means either:

  • Accounting software to record sales and costs
  • Spreadsheets plus bridging software that connects to HMRC
How we help: We can recommend a sensible setup based on how you work now — whether you want full bookkeeping software, or a spreadsheet-led approach.
02 — Reporting

Quarterly updates

You'll send four quarterly updates to HMRC each year using compatible software. These are summaries of income and expenses for each period — not a full tax return.

Key point: Quarterly updates are not the final tax return. Your final position is confirmed at year-end when you submit through software. We can handle all quarterly submissions on your behalf.
03 — Year-end

Year-end finalisation

At the end of the tax year, you'll finalise your figures and submit your return using compatible software. This is where you:

  • Make any necessary accounting or tax adjustments
  • Include other income sources not covered by quarterly updates
  • Confirm your final tax position
We'll handle this: Your year-end submission will be accurate, compliant, and properly finalised — just as it is today.
04 — Software

Software is essential

Under MTD for Income Tax, you or your accountant must use software that works with HMRC's system. This is non-negotiable — paper records alone are no longer sufficient.

We're certified Xero partners and can recommend the right software for your situation — from simple spreadsheet-bridging tools to fully automated cloud bookkeeping.

Already using Xero? You're ahead of the game. We'll make sure your setup is configured correctly for MTD compliance.
Reassurance

What stays the same.

Even though reporting becomes more frequent, some key things remain exactly as they are. More has stayed the same than changed.

TAX YEAR 6 APR → 5 APR PAYMENT DEADLINE UNCHANGED UNCHANGED UNCHANGED
The tax year still runs 6 April to 5 April Nothing changes about how the tax year is structured.
Quarterly updates aren't the final return You still finalise everything after the year ends, just as now.
The main payment deadline stays the same Typically 31 January — after the end of the tax year.
You can still use an accountant For many people, this is the easiest way to stay on track — just as it always has been.
Practical steps

What should you do now?

If you think you'll be affected — or you're not sure — here are the sensible next steps.

1

Confirm your position

Check whether you'll be mandated, and when, based on your qualifying income from self-employment and property.

2

Choose your records approach

Decide how you'll keep digital records:

  • Full accounting software (e.g. Xero, QuickBooks)
  • Spreadsheets + bridging software
3

Get set up early

Don't leave it until the deadline. Getting your software and routine in place now means the first quarterly update won't be a scramble.

4

Agree who does what

Decide with your accountant:

  • Who maintains the bookkeeping
  • Who submits quarterly updates
  • Who finalises the year-end return
Talk to us about getting ready
Questions

Common questions answered.

Still not sure? Get in touch — we'll give you a straight answer, not more jargon.

Ask us directly

No. MTD for Income Tax is aimed at individuals who report self-employment and/or property income through Self Assessment. Limited companies are not within MTD for Income Tax — though MTD for Corporation Tax is a separate matter being developed for the future.

If your qualifying income is below the threshold you're not mandated to join yet. However, it's worth getting your record keeping organised early — HMRC has already announced the thresholds will come down, and forming good habits now means a much smoother transition when your time comes.

There are exemptions available for those who qualify under digital exclusion. If you think this may apply to you, we can walk you through the criteria and help you understand your options. Not everyone will be required to comply.

MTD introduces a points-based penalty system for late submissions. However, for those mandated from 6 April 2026, HMRC has confirmed it will not apply penalty points for late quarterly updates during the first tax year (2026–27). Penalties can still apply for late tax returns or late payment.

No. Quarterly updates are summaries of income and expenses — not tax payments. The main payment deadline remains after the end of the tax year, typically 31 January. More frequent reporting does not mean more frequent payments.

You'll need to sign up and be ready before your mandatory start date. If you're an Oval Accountants client, we can guide you through the sign-up process and make sure everything is set up correctly well in advance of your deadline.