Making Tax Digital for Income Tax, what UK sole traders and landlords need to do before April 2026

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) has been delayed twice already, and as a result a lot of UK sole traders and landlords have stopped paying attention. That is now a problem: HMRC has confirmed the latest start dates and they are firm.

Who is in, and when

The rollout is staggered by income, not by entity type. The thresholds apply to combined gross income from self-employment and property:

• From 6 April 2026, anyone with combined self-employment / property income above £50,000 in the 2024/25 tax year.
• From 6 April 2027, anyone with combined income above £30,000 in the 2025/26 tax year.
• Below £30,000, currently outside MTD ITSA. HMRC has said it will review the threshold during the rollout but no decision has been announced.

Limited companies, partnerships, and trusts are out of scope for now, this is purely an Income Tax Self Assessment change.

What actually changes

Three things, and the third one is the one most people miss:

1. Quarterly updates. Five returns a year instead of one annual Self Assessment: four quarterly summaries plus a final declaration. Each quarterly update is filed within one month of the period end.
2. Digital records. You must keep your business income and expenses in MTD-compatible software, spreadsheets only count if they are connected to HMRC via bridging software. No more shoebox of receipts and a January catch-up.
3. The final declaration. This replaces the annual Self Assessment return and is where you confirm the year and add anything that was not in the quarterly updates (savings, dividends, gift aid, etc.). Most accountants, including KST, will handle this for clients alongside the quarterly filings, but it is worth understanding that it is now a discrete step.

Three things to do before April 2026

1. Find out which year you are in

If your 2024/25 self-employment plus property income was over £50k, you are in scope from 6 April 2026, that is around eleven months from now. If it was between £30k and £50k, you have until April 2027.

2. Pick MTD-compatible software now, not in March

Xero, QuickBooks Online, FreeAgent, Sage Accounting, and a few others are HMRC-listed for MTD ITSA. The choice usually comes down to three things: how comfortable you are with the interface, what your accountant uses (which determines how smoothly your data flows back and forth), and price. Switching software in the middle of a tax year is painful, so the cheap fix is to pick now and have the 2025/26 records already in place when MTD goes live.

3. Sign up, but do not sign up too early

Sign-up to MTD ITSA is opt-in until April 2026 (April 2027 for the £30k cohort). HMRC's pilot is running now, but signing up early means you start filing quarterly immediately. For most people the right approach is: get the software in place, run it through the 2025/26 year as if MTD were live, and only formally sign up when the deadline forces it. That gives you a year of practice without a real filing obligation.

What about Class 4 NIC and payments on account?

Both continue. MTD ITSA does not change what you pay, only how you report what you have earned. Payments on account in January and July still apply, Class 2 and Class 4 NIC still apply, and the tax due dates are unchanged.

What we tell our clients

If you are a KST client, we will move you onto MTD-compatible software well before your relevant start date and run the quarterly updates as part of your standard package. There is no add-on fee for MTD compliance, it is part of the engagement. If you are not yet a client and want a second opinion on whether you are in the April 2026 cohort or the April 2027 one, the free 30-minute consultation is the right starting point.

This article is general guidance and is current as of 30 April 2026. Tax thresholds and rules can change, speak to your accountant about your specific situation before making any decisions.