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MTD for ITSA Checker 2026

Check whether you must comply with Making Tax Digital for Income Tax Self Assessment (MTD ITSA) in tax year 2026-27, 2027-28 or 2028-29. The threshold based on combined self-employment + property income drops each year.

Your MTD ITSA status

  • MTD ITSA compliance required?No — below threshold
  • Tax yearTax year 2026-27 (starts 6 April 2026)
  • Total qualifying income£35,000.00
  • Threshold for this year£50,000.00
  • Headroom below threshold£15,000.00
  • Compliance starts6 April 2026
  • RecommendationYou're below the threshold for this year. You can continue with the standard Self Assessment process.

What is MTD for Income Tax and who must comply?

Making Tax Digital (MTD) for Income Tax Self Assessment is HMRC's flagship reform: from April 2026, self-employed individuals and landlords with combined qualifying income above £50,000 must keep digital records and submit quarterly updates to HMRC using approved software, plus a final declaration at year-end. The qualifying income is the sum of gross self-employment turnover and gross property/rental income. From April 2027, the threshold drops to £30,000; from April 2028, to £20,000. By the end of the rollout, an estimated 4 million people will be in scope. Compliance involves: choosing approved software (FreeAgent, Xero, QuickBooks Self-Employed, Sage 50, IRIS Elements, and others), maintaining digital records of all business transactions, submitting quarterly summary updates by the 7th of the month after the quarter ends (May, August, November, February), and submitting a final declaration by the 31st January following the tax year. Penalties for non-compliance start at £100 per missed deadline, and HMRC has flagged this as a priority enforcement area. Even if you're below the threshold, you can voluntarily sign up early to get used to the system — particularly worthwhile if you're approaching the threshold. As an example, if your self-employment income is £35,000 and rental income £18,000, your combined qualifying income is £53,000 — above the 2026 threshold, so you must comply from April 2026. The major MTD-compatible software providers are FreeAgent, Xero and QuickBooks.

Official source: gov.uk · Data updated: 2026-04-09

Frequently asked questions

What is MTD ITSA?

Making Tax Digital for Income Tax Self Assessment is the modernisation of how self-employed people and landlords report income to HMRC. Instead of one annual Self Assessment return, you'll submit four quarterly updates plus an end-of-period statement and a final declaration.

Who has to comply in April 2026?

Sole traders and landlords with combined gross income from self-employment and property exceeding £50,000 in tax year 2024-25 must comply from 6 April 2026. The threshold is based on the qualifying income from two years before the start of the tax year.

What software do I need?

You need HMRC-approved MTD-compatible accounting software. The major options include FreeAgent, Xero, QuickBooks Self-Employed, Sage Accounting, and IRIS Elements. Spreadsheets are also allowed if you use bridging software to submit data digitally to HMRC.

What are the deadlines?

Quarterly updates are due by the 7th of the month following each quarter end (5 July, 5 October, 5 January, 5 April → submit by 7 August, 7 November, 7 February, 7 May). The final declaration replaces the Self Assessment and is due 31 January following the tax year.

What happens if I'm just below the threshold?

You're not required to comply, but if you're growing fast, prepare ahead — once you're in the system, you stay in it. Even staying out, you'll still file standard Self Assessment. Many practitioners are recommending early voluntary adoption to test workflows and avoid last-minute pressure.

Are there penalties for non-compliance?

Yes. The penalty system uses 'points' for late submissions: 4 points (one for each quarterly update missed) trigger a £200 penalty, with further fines for ongoing non-compliance. Late payment also accrues 4% interest plus penalty surcharges. HMRC has signalled aggressive enforcement from year one.

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