What is Making Tax Digital for Income Tax?

What MTD for Income Tax is

Making Tax Digital for Income Tax, often shortened to MTD for Income Tax or MTD for ITSA, is a new way of reporting self-employment and property income to HMRC. You still submit one tax return a year. What changes is that you keep your records digitally, send HMRC a quarterly update of your figures, and submit your tax return through compatible software rather than HMRC's own portal.

It is not a new tax. The tax you pay does not change. What changes is how, and how often, you report your figures.

This is already in effect. The rules became mandatory on 6 April 2026 for the first group of sole traders and landlords, so if you are in scope, this affects you now rather than at some point in the future.

The quickest way to know whether this applies to you is your income. Want the full answer? See Do I need to do MTD? Thresholds and who is affected.

What is actually changing

MTD for Income Tax brings four changes. The first three are new. The fourth is included because it is the one people most often get wrong: your payment dates do not move.

1

Keep digital records
You record your income and expenses using MTD-compatible software. A paper cashbook no longer counts. A spreadsheet can still be used, but only if bridging software links it to HMRC. See bridging software for spreadsheet users.
2

Send four quarterly updates a year
For each sole trader business and each property business you have, you send HMRC a short summary of income and expenses every three months. These are running totals, not four separate tax returns.
3

Submit your tax return after the tax year
Once the year ends, you confirm your final figures and add anything else, such as employment or savings income. This is still a tax return, filed through your MTD software rather than HMRC's online portal.
4

Your tax payment dates stay the same
You still pay by 31 January, with payments on account on 31 July where they apply. Reporting four times a year does not mean paying four times a year.

Worried the quarterly updates mean paying tax four times a year? They do not. See What quarterly updates actually involve.

Is Self Assessment ending?

No. Self Assessment is not ending.

If you are in MTD, you still submit a tax return every year, covering the same ground as before: income, expenses, reliefs, and a formal confirmation that the figures are correct. The difference is that it must be filed through your MTD software rather than HMRC's own online portal. The 31 January deadline does not change.

If you are not yet in MTD, nothing changes. You carry on filing Self Assessment as normal.

In your first year of MTD there is an overlap: you file a traditional Self Assessment return for the previous tax year while starting quarterly updates under MTD. That settles after year one.

For how the first year works and when the last traditional return is due, see The transition year: still filing Self Assessment, and how it changes.

Who this affects, and when

MTD for Income Tax is being brought in over three years, starting with higher earners. It applies to sole traders and landlords whose combined self-employment and property income is above a set threshold:

Over £50,000, from April 2026
Over £30,000, from April 2027
Over £20,000, from April 2028

The figure is your gross income before expenses, and it adds your self-employment and property income together. It does not include employment wages, pensions, dividends or savings interest. Companies and partnerships are not in scope for now.

One point that catches people out: the threshold is based on your total income across all your trades and property, not on each one separately. Two sources that each sit below the threshold can still add up to put you in scope.

Whether MTD applies to you, and from which date, depends entirely on your numbers. That is covered in full on the thresholds page.

Common questions

No. MTD changes how often you report your figures, not how often you pay. Your tax is still due by 31 January, with payments on account on 31 July where they apply.

No. Self Assessment is not ending. If you are in MTD, you still file a tax return every year by 31 January, covering the same ground as before. The difference is that it must go through your MTD software rather than HMRC's own portal. If you are not yet in MTD, nothing changes and you carry on filing Self Assessment as normal.

Yes. MTD became mandatory on 6 April 2026 for sole traders and landlords with qualifying income over £50,000. Lower income groups are brought in over the following two years.

No. Only self-employment and property income count towards the MTD threshold. Wages, pensions, dividends and savings interest are left out of that test, though some of them are still included on your year-end tax return.

An accountant can run the whole process for you, including the digital records and quarterly updates. But the legal duty to comply still sits with you, and using an accountant does not make you exempt from MTD.

This page is general guidance, not advice for your own circumstances. It was correct as at the date shown at the top, and tax rules and rates change over time. Please take advice on your own position before acting on anything here.

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