Reactive (response to change)

HMRC withdraws free online Self Assessment filing for MTD-ITSA taxpayers

From 6 April 2026, HMRC will withdraw its free online Self Assessment filing service for sole traders and landlords within the scope of Making Tax Digital for Income Tax. You will need third-party software to file both quarterly updates and your annual tax return.

Change event: HMRC withdraws online Self Assessment filing service for MTD-ITSA taxpayers from April 2026 Effective 6 April 2026

What is changing

HMRC is withdrawing its free online Self Assessment filing service for taxpayers who fall within the scope of Making Tax Digital for Income Tax Self Assessment (MTD-ITSA).

From 6 April 2026, if your qualifying income from self-employment or property exceeds £50,000 (based on the 2024-25 tax year), you will no longer be able to submit your annual final declaration — your tax return — through HMRC's own online portal. Instead, you must use third-party MTD-compatible software for both your quarterly updates and your year-end final declaration.

Taxpayers below the MTD-ITSA income thresholds can continue to use HMRC's online filing service for conventional Self Assessment returns.

Change
HMRC online Self Assessment filing withdrawn for MTD-ITSA taxpayers
Effective from
6 April 2026
Who is affected
Sole traders and landlords with qualifying income over £50,000 (2024-25)
What you must use instead
Third-party MTD-compatible software (for quarterly updates and final declaration)
Who is not affected
Taxpayers below the MTD-ITSA income thresholds — conventional Self Assessment filing continues
Legislative basis
Finance (No. 2) Act 2017, s.60(1)-(3); Income Tax (Digital Requirements) Regulations 2021

Why HMRC is withdrawing the service

MTD-ITSA requires taxpayers to maintain digital records using compatible software that preserves an unbroken digital link between their records and submissions to HMRC. The quarterly updates and final declaration must all flow through this software.

HMRC's existing online Self Assessment service does not support the digital linking requirements of MTD-ITSA. Rather than maintain a parallel filing route that would not meet the statutory digital record-keeping standard, HMRC is consolidating all MTD-ITSA filing through third-party software providers.

The change was announced alongside the Autumn Budget 2025 MTD-ITSA updates.

What this means for your costs

If you currently file your Self Assessment tax return directly through HMRC's online portal at no cost, you will now need to pay for commercial software. Costs vary by provider:

  • Free options are available from some providers for businesses with simple affairs — check HMRC's list of compatible software on GOV.UK
  • Paid subscriptions typically range from £10 to £40 per month depending on features
  • Accountant-managed software may be included in your accountant's fees if they file on your behalf

Professional bodies including ICAS have raised concerns that the withdrawal may disproportionately affect smaller businesses and digitally excluded individuals who relied on the free HMRC service.

Exemptions and alternative arrangements

You may be exempt from MTD-ITSA entirely if you:

  • Have qualifying income below £50,000 in 2024-25 (or below £30,000 from April 2027)
  • Have a Power of Attorney — permanently exempt from MTD-ITSA
  • Are under a deputyship appointed by the Court of Protection — permanently exempt
  • Cannot use digital tools due to disability, age, remoteness of location, or religious objection — you can apply for an exemption from HMRC

If you are exempt from MTD-ITSA, HMRC's online Self Assessment filing service remains available to you.

⚠️ You cannot use HMRC's portal for your 2026-27 tax return

If you are within the scope of MTD-ITSA from April 2026, your final declaration for the 2026-27 tax year (due by 31 January 2028) must be filed through MTD-compatible software. HMRC's online filing service will not accept it. Failure to file on time through the correct channel will attract a penalty point under the new points-based penalty system.

❗ What you need to do before 6 April 2026

If you currently file through HMRC's online portal and your qualifying income exceeds £50,000:

  • Choose MTD-compatible software from HMRC's published list on GOV.UK — do this now, not at the last minute
  • Set up your account and migrate your existing records to the new software
  • Test the quarterly update process before your first submission is due (7 August 2026 for Q1)
  • Speak to your accountant or bookkeeper if you use one — confirm they support MTD-ITSA filing and discuss how software costs will be handled
  • Check if you qualify for an exemption if you have difficulty using digital tools

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