From April 2026, HMRC will begin the phased rollout of Making Tax Digital for Income Tax Self Assessment (MTD ITSA).

These changes will affect many sole traders and landlords and represent a significant shift in how income tax is reported and managed in the UK.

The changes are outlined in HMRC’s technical note published in March 2025, which confirms the scope, timeline, and obligations under the new system.

Who will be affected and when?

Sole traders

Individuals runnign their business as sole traders will need to join MTD if your total gross income from self-employment exceeds:

  • £50,000 from 6 April 2026
  • £30,000 from 6 April 2027
  • £20,000 from 6 April 2028

Landlords

Landlords must also join MTD if their gross rental income exceeds the same thresholds above. This applies even if they are not otherwise self-employed.

Total gross income will be used to assess when an individual becomes subject to MTD.

For example, if you earn £25,000 from self-employment and £30,000 from property, your total income of £55,000 means you will fall under MTD from April 2026.

What will change?

Once subject to MTD ITSA, you will need to:

  • Keep digital records of your income and expenses using compatible software
  • Submit quarterly updates to HMRC via that software
  • Submit a final declaration after the end of the tax year to finalise your tax position

Are there any exemptions?

Some individuals are either exempt or their obligation to join MTD has been deferred. These include:

  • People with a Power of Attorney acting on their behalf
  • Non-UK resident entertainers or sportspeople with no other qualifying income
  • Those for whom HMRC is unable to provide a digital service
  • Until at least April 2027, ministers of religion, Lloyd’s underwriters, recipients of the Married Couple’s Allowance or Blind Person’s Allowance, and individuals who require the SA109 form (e.g. for residence or domicile reporting)

How we can help

If you will be effected by the change we can provide:

  • Clear information about when you need to comply with MTD
  • Support in setting up digital record keeping
  • Assistance with quarterly submissions and the annual declaration

Plan ahead

Although MTD for Income Tax will not apply to most clients until 2026 or later, we recommend preparing in advance to avoid disruption. If you would like to start using digital record keeping now or want to better understand how the changes will affect you, please get in touch.

Please contact us if you have any questions or need advice.