Making Tax Digital - All You Need To Know

What does Making Tax Digital mean for the self-employed?
Sole traders and landlords with an overall income above £50,000 need to have MTD for ITSA compatible software in place before 6 April 2026. This is when the first phase of Making Tax Digital for Income Tax Self Assessment (ITSA) comes into effect. Those with income above £30,000 will be mandated from April 2027.
Instead of using HMRC’s website to file returns, you’ll need to keep digital records and use compatible software. From 6 April 2026, you’ll need to submit quarterly updates to HMRC, as well as an End of Period Statement (EOPS) at the end of your fourth quarter, and a Final Declaration that includes all other taxable income by 31 January every year.
VAT registered sole traders will already be familiar with MTD rules. From April 2019, MTD rules became mandatory for all VAT-registered businesses earning above £85,000. From April 2022, all VAT registered businesses will need to keep digital records and submit VAT returns with MTD software
Making Tax Digital Timeline HMRC
April 2019.
MTD is introduced for all VAT registered businesses with a taxable turnover of over £85,000
April 2021.
Digital Links become mandatory for MTD for VAT.
April 2022.
All VAT Registered businesses, regardless of turnover, must comply with MTD for VAT rules.
April 2022.
HMRC begins its MTD for ITSA pilot scheme. Xero launches its ITSA beta programme.
April 2026.
Making Tax Digital for Income Self Tax Assessment (MTD for ITSA) comes into effect for sole traders and landlords earning over £50,000.
April 2027.
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) comes into effecct for sole traders and landlords earning over £30,000.
When does MTD for ITSA start for the self-employed?
For sole traders and landlords earning above £50,000 annually, MTD for ITSA starts from April 2026.
For sole traders and landlords earning above £30,000 annually, MTD for ITSA will start from April 2027.
For smaller businesses and those below the £30,000 threshold, the government will review how the MTD for ITSA service can be shaped to meet their needs and help them fulfil their income tax obligations. Once this review is complete, plans will be put in place for any further mandation of MTD for ITSA.
When is the deadline for MTD for ITSA?
Those who follow the tax year will have a digital start date of 6 April 2026. If you don’t follow the tax year, your digital start date is the day your accounting period begins, which will fall on or after 6 April 2026.
While the deadline might seem a little way off, you can sign up voluntarily to start getting used to MTD rules. Find out whether you’re eligible for early MTD ITSA registration here.

More Common Questions About Making Tax Digital
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