Making Tax Digital 2026: What Changes and Who It Affects

Introduction

From April 2026, Making Tax Digital for Income Tax (MTD ITSA) is scheduled to begin for people with combined self-employment and property income over GBP 50,000. If you are in that group, you will need to keep digital records and submit quarterly updates through MTD compatible software.

This guide explains what changes in 2026, who is affected first, and how to prepare.

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What is changing in April 2026?

The key change is the start of MTD ITSA for higher-income sole traders and landlords. This means:

• digital record keeping becomes mandatory
• quarterly updates must be submitted to HMRC
• year-end submissions replace the traditional Self Assessment return for in-scope taxpayers

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Who is affected first?

Under the current plan:

• Income over GBP 50,000: MTD ITSA starts April 2026
• Income over GBP 30,000: MTD ITSA starts April 2027

Income is measured as total gross income from self-employment and property, before expenses.

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What you need to do

To comply with MTD ITSA you will need to:

1. Keep digital records of income and expenses
2. Use HMRC approved software to submit updates
3. Submit quarterly updates during the tax year
4. Submit an End of Period Statement and final declaration after the year ends

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How to prepare now

• move your records into a digital system
• confirm whether your income exceeds the threshold
• choose MTD compatible software
• set a monthly routine for record keeping

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How QTax helps

QTax is built for MTD ITSA compliance. It keeps your records digital, calculates your tax position, and guides you through each submission so you are ready for 2026.

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FAQs

Is MTD ITSA definitely starting in 2026?

That is the current HMRC plan. Timelines can change, so check the latest HMRC guidance each year.

Does MTD replace Self Assessment?

For in-scope taxpayers, MTD ITSA replaces the traditional annual Self Assessment return with quarterly updates and year-end submissions.

What if my income is just below GBP 50,000?

You may not be mandated in 2026, but you should still prepare early if your income is close to the threshold.

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Conclusion

MTD ITSA in 2026 is a major shift for higher-income sole traders and landlords. Preparing now with digital records and compatible software will make the transition much easier.