What Is Changing from April 6, 2026
- Who is affected: Any sole trader or landlord with combined qualifying income (from self-employment and property) of £50,000 or more in the 2024-25 tax year must start using Making Tax Digital for Income Tax (MTD ITSA) from 6 April 2026.(gov.uk)
- What you’ll need to do:
- Keep digital records of all income and expenses for self-employment and property.(gov.uk)
- Use HMRC-approved software. Spreadsheets alone won’t be sufficient unless used via approved bridging software.(gov.uk)
- Submit quarterly updates (Q1-Q4) covering your income and expenses through the year.(gov.uk)
- Then file a final declaration after the tax year ends which replaces the traditional Self Assessment return.(gov.uk)
Key Deadlines & Phased Roll-Out
| Year | Qualifying Income Threshold | Start Date for MTD ITSA Phase |
|---|---|---|
| 2026-27 | £50,000+ | 6 April 2026 – submit quarterly updates starting in August 2026, annual declaration by 31 Jan 2028 (gov.uk) |
| 2027-28 | £30,000+ | 6 April 2027 (gov.uk) |
| 2028-29 | £20,000+ | 6 April 2028 (gov.uk) |
Compliance and Penalty Regime
- For the first 12 months from 6 April 2026, those joining the scheme will not receive penalty points for late quarterly updates.(gov.uk)
- After that, a points-based penalty system applies: repeated late submissions accumulate points; four points lead to a flat £200 penalty. Points expire after two years.(gov.uk)
Practical Steps and Examples
- Example: Sarah is a landlord with £55,000 gross rental income (and minor freelance work). She's in scope for April 2026. She must get software, keep records, submit updates quarterly, and file a final declaration by 31 Jan 2028. Missed a deadline? The first slip won’t incur points until after the 12-month grace period.
- Software choices: Evaluate br idging tools if already using spreadsheets; otherwise invest in approved full accounting software. Compare costs and features.
- Track-keeping: Separate self-employment vs property, keep invoices, bank statements, receipts; make regular updates monthly or quarterly to avoid end-of-year scramble.
What to Do Now
- Confirm if your total qualifying income for 2024-25 was over £50,000. If yes, begin preparations.
- Research and select HMRC-approved software.
- Digitise records if not already;
- Schedule reminders for quarterly deadlines (August, November, February, May).
- Talk to your accountant or tax adviser if you share revenue across self-employment and property income, as your combined income might bring you into scope even if each individually is lower.