What is MTD for ITSA?
MTD for ITSA (Making Tax Digital for Income Tax Self Assessment) is HMRC's regime requiring UK sole traders and landlords to keep digital records of business and property income, submit quarterly updates of income and expenses to HMRC via MTD-compatible software, and complete an end-of-year final declaration that replaces the traditional self-assessment tax return.
Who has to use MTD for ITSA
The mandate phases in by income threshold:
- From 6 April 2026 — sole traders and landlords with combined business and property income above £50,000 in the 2024 to 2025 tax year.
- From 6 April 2027 — threshold drops to £30,000 of combined business and property income.
- From 6 April 2028 — threshold drops to £20,000.
The £50,000 threshold is gross income from self-employment and property, not net profit. Income from employment, savings, dividends, and pensions does not count. If you cross the threshold once, you stay in MTD even if your income later falls.
What MTD for ITSA actually requires
Three obligations sit at the heart of the regime:
- Digital records. Income and expense data must be kept digitally throughout the year. Paper records and standalone spreadsheets are not enough on their own.
- Quarterly updates. Four times a year, you submit a summary of business income and allowable expenses to HMRC, broken down by their standard categories. Submissions go directly through MTD-compatible software.
- End-of-year final declaration. Replaces the old self-assessment return. Filed by 31 January after the tax year ends, alongside any other income (employment, dividends, etc.) you need to declare.
The deadlines that matter
Quarterly deadlines fall one month and seven days after the end of each quarter. For the standard fiscal-year quarters in 2026 to 2027:
- Q1 (6 April – 5 July 2026): submit by 7 August 2026
- Q2 (6 July – 5 October 2026): submit by 7 November 2026
- Q3 (6 October 2026 – 5 January 2027): submit by 7 February 2027
- Q4 (6 January – 5 April 2027): submit by 7 May 2027
- Final declaration: due 31 January 2028
You can opt to use calendar quarters instead. The deadline rule is the same: one month and seven days after each period end.
Penalties for missing MTD deadlines
HMRC operates a points-based penalty system. Each late quarterly submission earns one point. After four points (for quarterly filers), HMRC issues a £200 fine, and each subsequent late submission also costs £200. Points expire after 24 months of compliance. Late payment of tax owed is penalised separately, with interest plus tiered surcharges that escalate the longer the balance remains unpaid. Our MTD for ITSA penalties guide walks through worked examples.
Briefcase Ledger is purpose-built for MTD for ITSA. Bank feeds, AI categorisation, quarterly submissions, and the year-end declaration in one place — from £9/month.
See Briefcase LedgerFrequently asked questions
What does MTD for ITSA stand for?
MTD for ITSA stands for Making Tax Digital for Income Tax Self Assessment. It is HMRC's programme to digitise income tax filing for sole traders and landlords, replacing the annual self-assessment return with quarterly digital updates plus an end-of-year final declaration.
Who has to use MTD for ITSA?
From 6 April 2026, mandatory for sole traders and landlords whose combined business and property income exceeds £50,000 in the 2024 to 2025 tax year. Threshold drops to £30,000 from April 2027 and £20,000 from April 2028. Income from employment, dividends, savings, and pensions does not count towards the threshold.
When are the MTD for ITSA quarterly deadlines?
Quarterly updates are due one month and seven days after the end of each quarter. For fiscal-year quarters in 2026 to 2027: 7 August 2026, 7 November 2026, 7 February 2027, and 7 May 2027. The end-of-year final declaration is due 31 January after the tax year ends.
What software do I need for MTD for ITSA?
You need MTD-compatible software approved by HMRC. Most UK sole traders use a single all-in-one platform such as Briefcase Ledger, Xero, QuickBooks, or FreeAgent that handles both digital record keeping and submissions. Bridging spreadsheets are allowed if digitally linked to MTD-compatible software.