Starting from 6 April 2026, Making Tax Digital for Income Tax Self Assessment (MTD ITSA) will apply to sole traders and landlords with annual gross income over £50,000. This is part of HMRC’s push to digitalise the tax system and replace the traditional Self Assessment return.
Who is Affected?
If you are:
– A self-employed individual (sole trader), and/or
– A landlord earning rental income,
And your combined gross income from these sources is over £50,000 per tax year, you will need to follow MTD rules from the 2026–27 tax year.
From April 2027, the threshold will reduce to £30,000, and HMRC plans to extend it further in future years.
When Do You Start Submitting?
The first MTD reporting period begins on 6 April 2026, covering the tax year 2026–27. You’ll need to submit quarterly summaries of your income and expenses throughout the year, followed by a final declaration.
- Quarterly Reporting Deadlines:
| Quarter | Period Covered | Deadline |
| Q1 | 6 Apr – 5 Jul | 7 August |
| Q2 | 6 Jul – 5 Oct | 7 November |
| Q3 | 6 Oct – 5 Jan | 7 February |
| Q4 | 6 Jan – 5 Apr | 7 May |
What Do You Submit?
For each quarter, you’ll need to report:
– Total business income
– Summarised business expenses (e.g. rent, travel, utilities, professional fees)
At the end of the tax year, you’ll submit a Final Declaration (replacing the Self Assessment tax return), which includes:
– Adjustments (e.g. capital allowances)
– Confirmation of total income
– Tax calculation
You’ll still need to pay your tax bill by 31 January following the end of the tax year.
If I Have Two Trades – Do I Submit One or Two?
You must submit separate updates for each individual trade.
- If you run two self-employment businesses, each trade is treated as a separate business under MTD.
- You’ll need to submit:
- Separate quarterly updates for each trade
- Separate end-of-period statements (EOPS) for each
- These are later combined in the Final Declaration.
MTD for ITSA: Do You Still Need a Self-Assessment Return?
With Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) launching from 6 April 2026, many sole traders and landlords are asking:
“If I submit quarterly updates and a final declaration under MTD, do I still need to file a traditional Self-Assessment tax return (SA100)?”
According to HMRC guidance, if you are fully mandated into MTD for ITSA and submit your Final Declaration via MTD-compatible software, you do not need to also file a traditional Self-Assessment tax return (SA100).
What is the Final Declaration?
The Final Declaration under MTD:
- Replaces the SA100 tax return
- Includes adjustments (e.g. capital allowances)
- Allows entry of other income, such as:
- Interest
- Dividends
- Employment income
- Foreign income
You must provide a complete picture of your income digitally before making the declaration.
Which Scenarios Exempt a Client who is Above the £50,000 Threshold
1. Digital Exclusion (Exemption on Practical Grounds)
If the client cannot use digital tools due to:
- Age
- Disability
- Remoteness of location (e.g. no internet access)
- Religious grounds (e.g. religious objection to technology)
2. Trusts, Estates, and Partnerships (Currently Excluded)
As of the current HMRC position:
- Trusts (including bare trusts)
- Estates of deceased individuals
- Partnerships (including LLPs)
- Trustees of pension schemes
- Non-resident companies
If I Have Multiple UK Rental Properties – Do I Submit One or Many?
You submit one combined submission for all UK property income.
- No need to split by individual property
- All income and expenses from UK rental properties are aggregated
- Only one quarterly update and one EOPS is required for UK property income
Overseas property income is reported separately under a different property business type.
