The 4 Core MTD ITSA Requirements
Understanding what MTD actually demands from you before the April 2026 deadline.
Digital Record-Keeping
All income and expenses must be recorded in HMRC-approved software or a compliant digital system from day one of your MTD start date. Paper records alone are no longer sufficient.
Quarterly Submissions
You must submit a summary of income and expenses to HMRC four times a year — in August, November, February, and May. Each submission covers one three-month period.
Final Declaration
At year end, a Final Declaration replaces the old Self Assessment return. This is due by 31 January and is where your tax liability is confirmed and payment falls due.
Approved Software
You cannot file quarterly updates through HMRC's website. You must use approved third-party software (Xero, QuickBooks, FreeAgent, or similar) that connects to HMRC's MTD API.
Per-Property Records (Landlords)
Landlords must track income and expenses at the individual property level — not as a pooled total. Each property needs its own income and expense records in your software.
Threshold Based on Gross Income
The MTD threshold is based on gross income before expenses, not profit. A landlord receiving £55,000 rent but spending £20,000 on costs has qualifying income of £55,000 — above the April 2026 threshold.
MTD ITSA Rollout Timeline
Three phases — find which one applies to you.
Phase 1
April 2026
Income over £50,000/year
Higher-income landlords, established freelancers and consultants. Digital records required from 6 April 2026.
Phase 2
April 2027
Income over £30,000/year
Mid-range landlords and part-time self-employed. Start preparing now — April 2027 is closer than it seems.
Phase 3
~2028 (TBC)
Income over £20,000/year
Most remaining landlords and sole traders. Not yet legislated but expected to follow the same pattern.
Explore the MTD Knowledge Hub
Go deeper on any aspect of MTD ITSA with our free guides.
What is Making Tax Digital?
The complete overview — how MTD works, why HMRC introduced it, and what changes for landlords and sole traders.
Read guide →Who Needs to Comply?
Detailed threshold guide — what counts as qualifying income, how combined sources are assessed, and who is exempt.
Read guide →MTD Start Dates and Deadlines
The full quarterly submission calendar, what to prepare before April 2026, and a step-by-step readiness checklist.
Read guide →What Software Do You Need?
Xero vs QuickBooks vs FreeAgent — comparison of MTD-approved software and whether your spreadsheet is compliant.
Read guide →Quarterly Reporting Explained
Step-by-step guide to how submissions work, all four deadlines, and how the Final Declaration replaces Self Assessment.
Read guide →Penalties for Non-Compliance
How HMRC's new points-based system works, when the £200 fine triggers, and how to avoid every penalty.
Read guide →MTD Checklist for Landlords
A step-by-step interactive preparation checklist covering everything landlords need to do before April 2026.
View checklist →MTD Checklist for Freelancers
Everything sole traders and freelancers need to prepare — software, records, HMRC registration, and deadlines.
View checklist →Ready to hand over MTD entirely?
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