Latest answers to your Making Tax Digital for Income Tax Self Assessment questions

Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is a UK government initiative to modernise the tax system by requiring digital record-keeping and reporting for income tax. The implementation of MTD for ITSA has been subject to several delays and changes since its inception.

Currently, it is set to be introduced in phases starting from 6 April 2026, with different income thresholds determining when taxpayers must comply. The system will require quarterly digital reporting of income and expenses, as well as an annual final declaration, replacing the current self-assessment tax return process.

Who is included? 

MTD for IT will become mandatory for sole traders and landlords in phases starting from 6 April 2026.

The starting date is dependent on the individual’s gross income before expenses are deducted and is mandatory in phases starting from 6 April 2026 as detailed below:

• From 6 April 2026: The gross income threshold from these sources is more than £50,000; 
• From 6 April 2027: The gross income threshold from these sources is more than £30,000; 
• From 6 April 2028: The gross income threshold from these sources is more than £20,000. 

The government announced the expansion of MTD to include sole traders and landlords with income over £20,000 from April 2028 in the Spring Statement in its policy paper Modernising the tax system through Making Tax Digital. 

The threshold test applies to the combined gross income of an individual’s trade(s) and property income, including overseas property income. For example, an individual with trading sales of £30,000 and £21,000 gross rental income, must report under MTD from 6 April 2026.

Who is excluded? 

In addition to those below the thresholds, partnership members including LLPs are outside MTD in respect of their partnership income. Where partners are in receipt of sole trade or rental income outside the partnership, the normal rules apply. Limited companies are excluded.

Automatic exemptions and exclusions (where an application is required) are listed at: Find out if you can get an exemption from Making Tax Digital for Income Tax.

The registration process

• Before 6 April 2026, HMRC will identify from the 2024–25 filed tax returns, individuals with qualifying income of more than £50,000.
• They will write to the individual to confirm that they must start using MTD by 6 April 2026.
• The individual or you as agent must find software that works with MTD and authorise it.
• The individual or you as agent must sign up for Making Tax Digital for Income Tax.
• Before 6 April 2027, the same process will apply to tax returns filed for 2025–26, where the qualifying income is between £30,000 and £50,000.

HMRC’s online tool to check if an individual is within MTD is at: Find out if you can get an exemption from Making Tax Digital for Income Tax.

HMRC guidance on working out an individual’s qualifying income is at: Working out your qualifying income.

To read more and to get access to our full MTD for ITSA Q&A: Register here 

This blog is one of a series of articles from our commercial partners. The views expressed are those of the author and not necessarily those of ICAS.