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Making Tax Digital for Income Tax Self Assessment compliance checklist

Making Tax Digital for Income Tax Self Assessment becomes mandatory from 6 April 2026 for self-employed individuals and landlords with qualifying income over £50,000. You must use HMRC-compatible software to keep digital records and submit quarterly updates. A 12-month soft landing on penalties applies for the first year.

Change event: Making Tax Digital for Income Tax Self Assessment (MTD-ITSA) mandatory from April 2026 Effective 6 April 2026

What is changing

From 6 April 2026, Making Tax Digital for Income Tax Self Assessment (MTD-ITSA) becomes mandatory for self-employed individuals and landlords whose total business or property income exceeds £50,000 in the 2024-25 tax year.

This replaces manual record-keeping and annual paper Self Assessment returns with a digital system requiring:

  • Digital record-keeping using HMRC-compatible software that maintains an unbroken digital link between your records and submissions
  • Quarterly updates submitted to HMRC on fixed dates throughout the tax year
  • End-of-period statement and final declaration within the existing Self Assessment deadline (31 January following the tax year)

The rollout is phased. The threshold drops to £30,000 from 6 April 2027 (for 2025-26 income), and the government plans to lower it further to £20,000 from April 2028. Approximately 780,000 people join MTD-ITSA in 2026, with a further 970,000 joining in 2027.

Mandatory from
6 April 2026
First-year threshold
£50,000 qualifying income (2024-25)
Second-year threshold
£30,000 qualifying income (2025-26, from 6 April 2027)
Planned third-year threshold
£20,000 (from April 2028, subject to legislation)
Soft landing period
April 2026 to March 2027 (no penalties for late quarterly updates)
Late quarterly update penalty (after soft landing)
4 points trigger £200 penalty (one point per missed quarterly deadline)
Digital records failure penalty
Up to £3,000 for failure to keep digital records or breaks in digital links
People affected (2026)
~780,000
People affected (2027)
~970,000 additional
Legislation
Finance (No. 2) Act 2017, s.60(1)-(3); Income Tax (Digital Requirements) Regulations 2021
Self Assessment tax gap
18.5% (~£5 billion)

Who must comply from April 2026

You must join MTD-ITSA from 6 April 2026 if you are:

  • Self-employed with business income over £50,000 in the 2024-25 tax year
  • A landlord with property income over £50,000 in the 2024-25 tax year
  • Both — if your combined business and property income exceeds £50,000

The £50,000 threshold is based on your qualifying income before expenses. It applies to your total business turnover or total rental income, not your taxable profit.

Partnerships are excluded from the initial rollout. HMRC has not confirmed when MTD-ITSA will be extended to partnerships.

❗ Action required: check your 2024-25 income

Review your business and property income for the 2024-25 tax year (ending 5 April 2025). If your qualifying income exceeds £50,000, you must prepare to join MTD-ITSA by 6 April 2026. This includes selecting compatible software, migrating your records, and understanding the quarterly update deadlines.

Software requirements

You must use HMRC-compatible software to maintain digital records and submit quarterly updates. The software must maintain an unbroken digital link between your income and expense records and your submissions to HMRC.

HMRC publishes a list of compatible software providers on GOV.UK. Some software is free for businesses with simple affairs; others charge subscription fees. Choose software that:

  • Is listed on HMRC's compatible software register
  • Supports your business type (self-employed, landlord, or both)
  • Integrates with your existing accounting processes
  • Maintains digital links (no manual re-keying of data)

You cannot use spreadsheets alone unless they are part of an HMRC-compatible software bridge that maintains the digital link.

❗ Action required: choose and set up software

Select your MTD-ITSA software now. Allow time to migrate your existing records, set up the software, and test quarterly submissions before the first deadline. Contact software providers to confirm they support MTD-ITSA (not just MTD for VAT) and ask about migration support.

Quarterly update deadlines

You must submit quarterly updates to HMRC on fixed dates set out in the Income Tax (Digital Requirements) Regulations 2021. The standard deadlines are:

  • Q1 (6 April – 5 July): due by 7 August
  • Q2 (6 July – 5 October): due by 7 November
  • Q3 (6 October – 5 January): due by 7 February
  • Q4 (6 January – 5 April): due by 7 May

Each update summarises your income and expenses for that quarter. These are not tax returns — they are interim reports. You still file a final declaration by 31 January following the tax year.

If you have both business and property income, you can submit separate updates for each or combine them in a single submission, depending on your software.

12-month soft landing on penalties

HMRC has introduced a 12-month soft landing for the first year of MTD-ITSA (April 2026 to March 2027). During this period:

  • No penalty points for late quarterly updates
  • Penalty points still apply for late filing of the 2026-27 year-end MTD tax return (due 31 January 2028)

After the soft landing ends, HMRC will apply a points-based penalty system. Four points trigger a £200 penalty — one point per missed quarterly deadline. Points accumulate over the tax year and the threshold resets once you have met all quarterly deadlines on time for a period.

Separate penalties of up to £3,000 can apply for failure to keep digital records or breaks in the digital link within your software.

⚠️ Penalties apply from April 2027

The soft landing is only for the first year. From April 2027, late quarterly updates will accrue penalty points, with a £200 penalty triggered after four points. Establish robust quarterly processes during the soft landing year so you are ready for full enforcement in 2027-28.

What this means for partnerships

Partnerships are not included in the April 2026 or April 2027 rollout. If you are a partner in a partnership, you do not need to join MTD-ITSA for your partnership income at this time.

However, if you also have separate self-employment income or property income over the threshold, you must join MTD-ITSA for that income. Your partnership income remains outside the scope for now.

HMRC has not confirmed when MTD-ITSA will be extended to partnerships.

ℹ️ Partnerships excluded

If you are a partner, you do not need to join MTD-ITSA for your partnership income. The April 2026 and April 2027 rollout applies only to self-employed individuals and landlords with income in their own name.

Compliance checklist

Complete these actions before 6 April 2026:

  1. Calculate your total business and property income for the 2024-25 tax year to confirm whether you exceed the £50,000 threshold
  2. Choose HMRC-compatible software from the published list on GOV.UK
  3. Set up your software account and integrate it with your existing accounting processes
  4. Migrate your existing records to the new software and ensure an unbroken digital link
  5. Test a quarterly submission before the first deadline (5 August 2026 for Q1)
  6. Mark quarterly deadlines in your calendar: 7 August, 7 November, 7 February, 7 May
  7. Understand the soft landing penalty relief for 2026-27
  8. Plan for full penalty enforcement from April 2027
  9. If you use an accountant or bookkeeper, confirm they support MTD-ITSA
  10. Check whether you qualify for any exemptions or additional support from HMRC

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