Making Tax Digital for Income Tax (often shortened to MTD for ITSA) is HMRC’s programme to move self-employed people and landlords from one annual tax return to regular digital reporting. If you are a sole trader in the UK, it is the biggest change to how you deal with HMRC in years. This guide explains it in plain English. It is general information, not tax advice, so always check GOV.UK or ask your accountant about your own situation.
What is Making Tax Digital for Income Tax?
Instead of gathering a year of records and filing one Self Assessment return, you keep digital records through the year and send HMRC short updates using compatible software. After the end of the tax year you confirm the final figures in a final declaration. The idea is that you see your tax position earlier and make fewer mistakes.
Three things change in practice:
- Digital records. Your income and expenses are kept in software, not on paper or loose spreadsheets.
- Quarterly updates. You send a summary of income and expenses to HMRC four times a year.
- A final declaration. After the tax year ends you finalise your figures and tax for the year, which replaces the usual Self Assessment return.
HMRC has adjusted the detail of these steps while rolling the scheme out, so check GOV.UK for the current process before each deadline.
Who has to join, and when?
MTD for Income Tax applies to sole traders and landlords based on their qualifying income. That is your gross income from self-employment and property, before you deduct any expenses. The rollout is staged:
- From 6 April 2026: qualifying income above £50,000.
- From 6 April 2027: qualifying income above £30,000.
- From 6 April 2028: qualifying income above £20,000.
HMRC decides whether you are in scope using the income on an earlier tax return, and it writes to people it expects to be affected. Partnerships and limited companies follow different rules. Because the details have changed more than once, use HMRC’s own checker on GOV.UK to confirm whether and when you must join.
The quarterly update deadlines
You send an update for each quarter of the tax year. The default quarters run from the 6th to the 5th of the month, and each update is due by the 7th of the following month:
- 6 April to 5 July: due by 7 August
- 6 July to 5 October: due by 7 November
- 6 October to 5 January: due by 7 February
- 6 January to 5 April: due by 7 May
You can choose calendar quarters instead (ending 30 June, 30 September, 31 December and 31 March), and the due dates stay the same. The final declaration is due by 31 January after the end of the tax year. Missing deadlines can lead to penalty points under HMRC’s points-based system, so put the dates in your diary.
What your quarterly update contains
An update is a summary, not a full set of accounts. It shows your income and your allowable expenses for the period, broken into HMRC’s categories. You are not paying tax with each update: you still pay your tax on the usual Self Assessment dates. If you are not sure what counts as an allowable expense, see our guide to allowable expenses for sole traders.
How to prepare now
- Check whether you are in scope and from which date, using HMRC’s guidance.
- Move your records into software. Record every sale and cost as it happens, not once a year.
- Reconcile your bank regularly. Matching your bank statement to your records catches missing items early. See our guide to bank reconciliation.
- Keep your receipts. Attach them to the transactions so they are easy to find.
- Sign up for MTD with HMRC (or ask your accountant to) and authorise your software.
- Put the quarterly dates in your calendar and aim to finish a few days early.
How AvrioBooks helps
AvrioBooks keeps your invoices, bills and bank activity in one set of books, so the figures for each quarter are ready to use. For the update itself, you connect AvrioBooks to your HMRC account under Income Tax, fetch your obligations, upload a spreadsheet of income and allowable expenses, map its columns to HMRC’s categories, check the totals and submit. A history keeps a record of everything you have sent. See Making Tax Digital for Income Tax in the help centre for the steps.
Making Tax Digital in AvrioBooks needs the Standard plan or above and depends on HMRC approval. Contact us to confirm it is available for your business before you rely on it for a live submission. You can read more on our page for sole traders.
Common questions
Does MTD change when I pay tax? No. Tax payment dates stay the same, for example 31 January and 31 July for payments on account.
Can I still use spreadsheets? You can keep records in a spreadsheet, but it must be linked to HMRC through compatible software or a bridging tool. Many people find it simpler to keep all records in accounting software.
What if I am below the threshold? You carry on with Self Assessment as before until HMRC tells you otherwise, although you can still use accounting software to keep your records tidy.
Frequently asked questions
What is Making Tax Digital for Income Tax?
It is HMRC's system for sole traders and landlords to keep digital records and send regular updates, replacing the single annual Self Assessment return for people in scope.
Who has to join Making Tax Digital for Income Tax?
From 6 April 2026 if qualifying income is above £50,000, from 6 April 2027 above £30,000 and from 6 April 2028 above £20,000. Qualifying income is gross self-employment and property income before expenses.
When are the quarterly updates due?
By 7 August, 7 November, 7 February and 7 May for the default quarters, with the final declaration due by 31 January after the tax year ends.
Can AvrioBooks send Making Tax Digital updates?
Yes, on the Standard plan and above and subject to HMRC approval. You connect to HMRC, fetch your obligations, upload and map your figures, review and submit.
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