MTD for Income Tax Is Live: Your 2026 Compliance Checklist

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) launched on 6 April 2026. HMRC estimates roughly 864,000 sole traders and landlords must now keep digital records, submit quarterly updates through compatible software, and complete a year-end declaration — not just an annual Self Assessment return.

If your combined self-employment and UK property income exceeded £50,000 in 2024–25 (before expenses), you are in scope for the 2026–27 tax year. Lower thresholds of £30,000 from April 2027 and £20,000 from April 2028 will bring more taxpayers into MTD over time.

Are you in scope?

HMRC uses your 2024–25 gross income from self-employment and UK property — added together across all businesses — to determine whether the £50,000 threshold applies. Income from employment, dividends, and foreign property does not count toward this particular threshold.

Use HMRC's online checker to confirm your status. You need to be registered for Self Assessment and to have filed a return in the last two years before signing up for MTD ITSA. Tax agents can register on your behalf from 1 April 2026.

Digital record-keeping requirements

From 6 April 2026, every in-scope transaction must be recorded digitally in software that can create, store, copy, and correct records. Manual shoeboxes and disconnected spreadsheets no longer meet the standard unless bridged through MTD-compatible software.

FinnAccountings imports UK bank feeds, categorises income and expenses automatically, and maintains a digital audit trail HMRC recognises — eliminating the gap between your bank and your quarterly submission.

Quarterly update deadlines for 2026–27

Quarterly updates summarise business income and allowable expenses for each three-month period. For the 2026–27 tax year, submission deadlines fall five days after the month end following each quarter: 7 August 2026 (Q1), 7 November 2026 (Q2), 7 February 2027 (Q3), and 7 May 2027 (Q4).

The first quarterly update — covering 6 April to 5 July 2026 — is due 7 August 2026. If you are reading this in June, you have weeks to confirm your software, reconcile Q1 transactions, and submit on time.

Year-end declaration and Self Assessment

After four quarterly updates, you submit a final declaration reconciling the year and claiming any additional reliefs. This replaces the traditional SA100 for in-scope income, though you may still need supplementary pages for other income sources.

Your balancing payment and any payments on account remain due by 31 January following the tax year — 31 January 2028 for 2026–27. Quarterly updates do not replace the need to pay tax; they give HMRC earlier visibility into your income.

Penalties and the first-year grace period

For 2026–27 only, HMRC will not issue penalty points for late quarterly submissions — but you must still submit all updates before your final declaration. From 2027–28 onward, late quarterly or year-end submissions earn penalty points: £200 when you reach four points, plus £200 for each further miss.

Late payment penalties tier from 3% (days 16–30 in 2026–27) upward, with daily interest accruing from day one. A 30-day grace period applies to the first late payment in 2026–27. Contact HMRC early if cash flow makes a payment difficult.

Practical steps for June 2026

Confirm you are registered for MTD ITSA through HMRC's portal. Select and test MTD-compatible software before Q1 closes. Separate self-employment and property records if you have both. Build an internal calendar for quarterly deadlines — our Compliance Agent sends reminders at 30, 14, and 7 days.

Start a free trial with FinnAccountings to connect accounts, review Q1 categorisations, and prepare your first quarterly update before the 7 August deadline.