How self-employed individuals and landlords can prepare for Making Tax Digital (MTD)

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) has now launched for the first wave of taxpayers. From April 2026, self-employed individuals and landlords with qualifying income over £50,000 are required to comply. Further phases will bring in more taxpayers over the next two years.

What is Making Tax Digital?

Making Tax Digital is HMRC's initiative to digitalise the UK tax system. It requires taxpayers to keep digital records and submit tax information to HMRC through compatible software on a quarterly basis, replacing the current annual Self Assessment tax return for affected individuals.

Who is affected and when?

MTD for ITSA is being rolled out in phases:

| From | Qualifying income threshold | |---|---| | April 2026 | Over £50,000 | | April 2027 | Over £30,000 | | April 2028 | Over £20,000 |

"Qualifying income" means the combined gross income from self-employment and property before expenses. Partnerships are subject to a separate consultation and no mandatory start date has been confirmed for them yet.

If you have qualifying income over £50,000, you are required to comply now. If you have not yet transitioned to MTD-compatible software and begun quarterly submissions, you should act immediately.

What do you need to do?

Under MTD for ITSA, affected taxpayers must:

1. Keep digital records – all business income and expenses must be recorded using MTD-compatible software (HMRC-approved)
2. Submit quarterly updates – a summary of income and expenses must be sent to HMRC four times per year, within one month of each quarter end
3. Submit an End of Period Statement (EOPS) – an annual finalisation confirming the accuracy of the year's figures
4. Submit a Final Declaration – this replaces the traditional Self Assessment tax return and must be submitted by 31 January following the end of the tax year

Quarter dates under MTD

The standard quarterly submission deadlines are:

| Quarter | Period | Submission deadline | |---|---|---| | Q1 | 6 Apr – 5 Jul | 5 Aug | | Q2 | 6 Jul – 5 Oct | 5 Nov | | Q3 | 6 Oct – 5 Jan | 5 Feb | | Q4 | 6 Jan – 5 Apr | 5 May |

Taxpayers can also opt for calendar quarter dates (ending 31 Mar, 30 Jun, 30 Sep, 31 Dec) if preferred.

Choosing MTD-compatible software

HMRC maintains a list of approved MTD for ITSA software. Popular options include products from Xero, QuickBooks, FreeAgent, and Sage. Your choice of software will depend on the complexity of your affairs, your existing bookkeeping setup, and cost. We can advise on the most suitable option for your circumstances.

How to prepare if you're in the April 2027 or 2028 cohort

Even if you're not yet mandated, now is a good time to:

• Start using MTD-compatible software to get familiar with the process
• Ensure your record-keeping is digital and up to date throughout the year
• Speak to your tax adviser about how MTD will affect your specific situation

How we can help

At Bearstone, we are helping clients through the MTD transition — from choosing the right software and setting up digital records, to managing quarterly submissions on your behalf. If you're in the April 2026 cohort and haven't yet transitioned, please get in touch as a matter of urgency.