Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) has been discussed, delayed, and debated for years. As of 6 April 2026, it is finally here, and for sole traders and landlords with total annual income above £50,000, the first quarterly update period is already under way.

We have spoken to a fair number of clients over recent months who assumed they had more time to prepare, or who signed up without fully understanding what quarterly updates actually involve. This post sets out the current position as plainly as we can, covers what the rules require right now, and explains what you should be doing if you fall into scope.

If your income sits below £50,000 today, it is still worth reading. The threshold drops to £30,000 from April 2027 and to £20,000 from April 2028, so this is coming for most self-employed people sooner than they expect.

The mandatory start date for MTD for ITSA is 6 April 2026. It applies to anyone whose total gross income from self-employment and property combined exceeds £50,000 in a tax year.

A few points worth clarifying here. The £50,000 figure is gross income, not profit. If you are a landlord with rental income of £55,000 but significant mortgage interest and maintenance costs, your profit might be far lower, but you are still in scope based on the gross figure. Similarly, a self-employed consultant with multiple income streams needs to add them together to reach the threshold.

To sign up, you must be registered for Self Assessment and have submitted a tax return within the last two years. The sign-up process through HMRC also asks for your business start date or your property income start date, and the tax year from which you intend to use MTD. If you have not yet signed up and you are above the £50,000 threshold, this is the first thing to address.

For those who are not yet mandated but who are close to the threshold, voluntary sign-up is open. There are practical reasons to consider getting ahead: your software is bedded in, your processes are established, and you are not scrambling to comply when the deadline arrives.

The language around “quarterly updates” can create confusion, so it is worth being specific about what HMRC actually requires.

Each quarter, you submit a summary of your income and expenses to HMRC through MTD-compatible software. This is not a tax return. It is a running record of your trading or property activity, submitted digitally four times a year rather than once. The quarters for the 2026/27 tax year run to 5 July, 5 October, 5 January, and 5 April.

At the end of the tax year, you then complete an End of Period Statement (EOPS), which is where you make any adjustments and confirm the figures. After that, you submit a Final Declaration, which replaces the traditional Self Assessment tax return and settles your liability for the year.

The key practical implication is that you need MTD-compatible software in place and your bookkeeping kept up to date throughout the year. Shoebox accounting, where you pull everything together in January, does not work under this regime. That is a real change for a lot of sole traders, and underestimating it is one of the more common mistakes we are seeing at the moment.

Compatible software options include Xero, QuickBooks, FreeAgent, and Sage, all of which we work with regularly at Wings Online Filings.

HMRC has confirmed that penalty points will not be applied for late quarterly updates during the first tax year of mandation, which covers 2026/27. This is a deliberate soft-landing period, intended to give taxpayers and agents time to adjust to the new rhythm.

However, it is important to read the small print on this. The grace period covers penalty points for late quarterly updates only. It does not cover:

• Penalties for a late Final Declaration (the equivalent of a late Self Assessment return)
• Penalties for late payment of tax
• Interest on unpaid tax

So while HMRC is being pragmatic about the quarterly submissions this year, the consequences for missing your year-end obligations remain unchanged. If you are used to filing your Self Assessment return close to the 31 January deadline, you will need to build that discipline into the MTD calendar as well.

Our view is that the grace period is a helpful signal, not a reason to delay. The clients we have worked with who set up their software and processes properly from the start of the tax year find that the quarterly updates take a small amount of time each quarter. The ones who leave it tend to face a much bigger catch-up job later in the year.

If you are in scope for 2026/27 and have not yet put the necessary pieces in place, here is where to focus your attention.

1. Confirm your income position

Add up your gross income from self-employment and property for 2024/25 or 2025/26. If the combined total exceeds £50,000, you are mandated. If it is close to that figure and trending upwards, it is sensible to prepare anyway.

2. Choose and set up compatible software

You need MTD-compatible software before you can submit quarterly updates. Xero, QuickBooks, FreeAgent, and Sage all meet the requirement. The right choice depends on how you work, the complexity of your income sources, and whether you have a bookkeeper or accountant who already uses one of these platforms. If you are unsure, take advice before committing.

3. Register and sign up with HMRC

If you have not already done so, sign up through the HMRC MTD sign-up service. You will need your Government Gateway credentials, your business or property start date, and confirmation of the tax year you are starting from.

4. Keep your records current

Quarterly updates require quarterly bookkeeping. Set aside time each month rather than each quarter, and you will find it straightforward. Leave it to the last moment each quarter, and it quickly becomes stressful.

5. Talk to your accountant

If your accountant has not yet been in touch about MTD for ITSA, now is the time to raise it. The regime changes how they work with you as much as how you work with HMRC.

The April 2026 start was the first phase. The rollout continues from there.

From April 2027, MTD for ITSA will extend to sole traders and landlords with income above £30,000. From April 2028, the threshold is expected to fall further to £20,000. At that point, the vast majority of self-employed people in the UK will be inside the regime.

Partnerships are also expected to be brought into scope, though a confirmed date had not been published at the time of writing. Anyone operating as a partnership should keep a close eye on HMRC guidance over the next twelve months.

The direction of travel is clear: HMRC wants digital, quarterly reporting to become standard practice for everyone with self-employment or property income. Whether you welcome that or find it frustrating, preparing early is far less disruptive than scrambling to comply once you are mandated.

For those currently sitting just below the £50,000 threshold, it is genuinely worth modelling whether you are likely to breach it in 2025/26 or 2026/27. The threshold is assessed on the previous year’s figures in some cases, and the last thing you want is to discover mid-year that you should have signed up months earlier.