With Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) on the horizon, many self-employed individuals and landlords are asking the same question:
“Does MTD apply to me?”
The short answer is: it might. Whether you need to comply depends on your income, and the types of income you receive.
In this guide, we’ll explain who MTD for ITSA applies to, when it starts, the critical registration deadline, and what you need to do to prepare.
What is MTD for ITSA?
Making Tax Digital (MTD) is HMRC’s initiative to move tax reporting online.
MTD for ITSA will replace the traditional annual Self-Assessment process for many taxpayers. Instead of submitting one tax return each year, affected individuals will need to:
- Keep digital records of their income and expenses.
- Use compatible software to maintain those records.
- Submit quarterly updates to HMRC.
- Complete an end-of-year declaration.
The aim is to make tax reporting more accurate and reduce errors.
For many businesses and landlords, this means moving away from spreadsheets or paper records and adopting accounting software if they haven’t already done so.
When Does MTD for ITSA Start?
MTD for ITSA will be introduced in phases, as can be seen in our previous blog.
Important: 14 July 2026 Registration Deadline
Even though MTD for ITSA starts in April 2026, you must register with HMRC by 14 July 2026 if your income exceeds the £50,000 threshold for 2025/26 and you must file by 7th August 2026.
- Registering after this date could result in penalties or difficulties submitting your quarterly updates.
- This short window ensures you can transition smoothly from the traditional Self-Assessment system.
Does MTD Apply to Me?
A simple way to determine whether MTD is likely to affect you is to ask the following questions:
Are you self-employed?
If you run your own business as a sole trader and your qualifying income exceeds the relevant threshold, MTD for ITSA is likely to apply.
Do you receive rental income?
Landlords with property income above the threshold will also be required to comply.
Do you have both self-employed and rental income?
HMRC looks at your combined qualifying income from both sources.
For example:
- Self-employed income: £35,000
- Rental income: £20,000
- Total qualifying income: £55,000
In this scenario, you would fall within MTD for ITSA from April 2026.
Who Doesn’t Need to Comply Yet?
At present, MTD for ITSA generally does not apply if:
- Your qualifying self-employment and property income is below the current threshold.
- Your income comes solely from employment through PAYE.
- You only receive pension income.
- You do not complete a Self-Assessment tax return for self-employment or property income.
Some taxpayers may also qualify for exemptions, although these are expected to be limited.
An example of when MTD for ITSA doesn’t apply is when you have a £10k salary and a £25k self-employed income. In this case, you do not usually need to register for 2026 as the self-employed income alone is below the £50k threshold. However, you will need to register and file for 2028 as the £20k threshold will be exceeded.
What Counts as Qualifying Income?
HMRC generally looks at your gross income (turnover or rental income before expenses are deducted) from self-employment and property businesses.
Even if your profit is lower, gross income above the threshold brings you into MTD.
If you’re unsure whether you meet the threshold, it’s worth seeking professional advice.
Should I Start Preparing Now?
Even if MTD doesn’t affect you immediately, preparing early can make the transition much easier.
Getting your records organised and using digital software now can help you:
- Save time throughout the year.
- Improve the accuracy of your records.
- Avoid a last-minute rush when MTD becomes mandatory.
- Gain a clearer picture of your business finances.
How Can We Help?
The introduction of MTD for ITSA represents one of the biggest changes to the Self-Assessment system in recent years. Many taxpayers are unsure whether the new rules apply to them.
If you’re self-employed or receive rental income and would like to know whether you’ll be affected, our team can help you assess your position, choose suitable software, and ensure you’re ready well before the deadline.
If you require any advice regarding Making Tax Digital, or you require help with accounting, tax preparation, or payroll, please do not hesitate to contact us.
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