MTD Is Here: What Every Freelancer and Sole Trader Needs to Know
If you’re self-employed, you may have heard the phrase ‘Making Tax Digital’ and wondered what it actually means for you. The short answer: a lot is about to change — and April 2026 is closer than you think. MTD for Income Tax (also known as MTD ITSA) is HMRC’s biggest shake-up to the self-assessment system in a generation.
So, What Exactly Is MTD for Income Tax?
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) requires sole traders and landlords to keep digital records and report income and expenses to HMRC every quarter — through approved software like Sage, Xero, or QuickBooks.
Instead of filing one tax return a year, you’ll soon be submitting quarterly digital updates as well as your annual tax return. This means keeping up to date digital records and submitting four quarterly updates per year, followed by the annual tax return which will include any other sources of income like bank interest or pensions.
Are You Affected?
You will fall under MTD for Income Tax from 6 April 2026 if your combined gross qualifying income from self-employment and/or property is over £50,000 — based on your 2024/25 tax return.
The threshold drops to £30,000 in April 2027, and £20,000 in April 2028. So even if you’re not in scope this year, you may well be soon.
What Are the New Deadlines?
For the 2026/27 tax year, your quarterly update deadlines are:
| Quarter | Period | Submit by |
|---|---|---|
| Q1 | 6 Apr – 5 Jul 2026 / 6 Apr – 30 Jun 2026 | 7 August 2026 |
| Q2 | 6 Jul – 5 Oct 2026 / 1 Jul – 30 Sep 2026 | 7 November 2026 |
| Q3 | 6 Oct 2026 – 5 Jan 2027 / 1 Oct – 31 Dec 2026 | 7 February 2027 |
| Q4 | 6 Jan – 5 Apr 2027 / 1 Jan – 31 Mar 2027 | 7 May 2027 |
| SA Return | Full self assessment tax return | 31 January 2028 |
Miss a deadline and you’ll receive a penalty point. Rack up four points and you’re hit with a £200 fine. HMRC has confirmed a soft-landing period in 2026/27, so no points will be issued for late quarterly updates in the first year.
What Do You Need to Do Right Now?
- Check your 2024/25 income — if gross income is over £50,000 from self-employment and/or property, you are in the first wave for April 2026
- Choose MTD-compatible software and set it up ready for April 2026
- Start keeping digital records now — get into the habit early
- Separate your personal and business bank transactions — now is the time to get a dedicated business bank account if you don’t have one already
- Talk to your accountant about the transition if you haven’t already
The businesses that will find this easiest are those that already track income and expenses on a regular real-time basis. If that’s not you yet, now is the time to start.
The Bottom Line
MTD for Income Tax is happening. The April 2026 deadline is firm.
The good news? With the right software and a bit of preparation, quarterly reporting can actually make managing your tax easier — spreading the admin load across the year.
Get ahead now. Your future self will thank you.
Get the MTD facts
at your fingertips.
Download our MTD for Income Tax factsheet and keep everything you need in one place — thresholds, deadlines, and action steps, ready whenever you need them.
