Quarterly rhythm, not January rush: a 2026 guide to MTD for Income Tax

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is no longer a pilot or a consultation. Since 6 April 2026, sole traders and landlords with qualifying income above £50,000 have been required to keep digital records and send quarterly updates to HMRC. The change does not alter how much tax is due. It alters when and how the figures are reported.

By November 2026, the first quarterly deadline of 7 August has passed and the second, 7 November, has just gone. If your records are still held together with routine and a little guesswork, there is no advantage in panic. The practical response is to treat the next quarter as the one that establishes a repeatable system.

Who is in scope

Broadly, you are in scope if you are a sole trader or a landlord and your qualifying income was over £50,000 in the 2024-25 tax year. Qualifying income is generally gross income from self-employment and property, before expenses. It is not the same as profit. A person with £30,000 of trading income and £25,000 of rental income may therefore be within scope even though neither source alone exceeds the threshold. Limited companies, most partnerships and trusts are not in this first phase. If you are unsure, check your 2024-25 figures and speak to your accountant; the cost of clarifying your position is usually far lower than the cost of assuming you are outside the regime.

What HMRC means by a digital record

Digital record-keeping does not mean every receipt must arrive by email or that paper is banned. It means the underlying records used to complete your quarterly updates must be kept in compatible software. In practice, you need to record income and expenses digitally, with enough detail to show the date, amount and category. Supporting documents, such as receipts and invoices, can be photographed or scanned and stored electronically. A carrier bag of paper in a cupboard is not a digital record; a folder of dated images linked to your software is.

Quarterly updates are summary totals, not full accounts. You are not expected to file a miniature tax return four times a year. The final declaration, due by 31 January after the tax year ends, remains the point at which reliefs, allowances and the final tax position are settled. For 2026-27, that declaration is due by 31 January 2028.

Choosing software without overspending

Software choice should follow your work, not a sales demonstration. A sole trader with a handful of invoices each month may need little more than bank-feed reconciliation and expense capture. A landlord with several properties may need rent tracking, mortgage interest records and a clear property-by-property view. An accountant or agent may prefer software that allows shared access.

Before paying for a suite of features you will not use, check the HMRC list of compatible software and ask three questions: Can it submit quarterly updates directly? Can it handle the type of income I actually receive? Can my accountant access it without duplicating the work? Free and low-cost products exist, and a spreadsheet can be part of a compliant setup only where it is used with compatible bridging software. The cheapest option is not always the least expensive, but the most feature-rich option is rarely necessary for a single trader with straightforward affairs.

A first-quarter checklist

Even if the first quarter has passed, use this as a reset:

• Reconcile the quarter's income to your bank statements, including cash and card receipts.
• Categorise expenses consistently and keep the evidence behind each line.
• Photograph and label receipts while the supplier and date are still clear.
• Check property income separately if you have rental accounts, including jointly owned property.
• Review your software setup now, before the next quarter adds another layer of paperwork.
• Diarise the next quarterly deadline and the final declaration date.
• Keep a short note of any assumptions or unresolved items so that they can be checked later.

Quarterly updates should not be confused with payments on account. Sending an update is a reporting event; paying tax is a separate matter. Keep an eye on your payments on account and budget for them, but do not treat the quarterly filing itself as a bill.

The calm version of compliance

The traders and landlords who will find MTD least disruptive are not necessarily the most technologically enthusiastic. They are the ones who have reduced the process to a short, regular routine. A twenty-minute weekly review, a dated folder for receipts and a software setup that matches the shape of their income will do more than a frantic weekend in January.

MTD for ITSA rewards consistency. It does not demand perfection. If a figure is later corrected, the system allows for amendment. If a quarter is filed slightly late, the practical priority is to get back into rhythm. The deadline is real, but it is not a cliff edge. The aim for 2026 is simple: keep records that you can explain, file updates that you can stand behind, and leave the final declaration to confirm the position rather than reconstruct it.