A major change to UK tax reporting is coming and many self-employed people don’t know about it yet.
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) will require thousands of sole traders, influencers, online sellers, and freelancers to change how they report their earnings to HMRC. If your income from self-employment or property exceeds £50,000, the deadline is April 2026. Here’s everything you need to know.
What Is Making Tax Digital for Income Tax?
Making Tax Digital (MTD) for Income Tax is a government initiative that replaces the annual Self Assessment tax return with quarterly digital submissions. Instead of filing once a year, you’ll update HMRC every three months using MTD-compatible accounting software, then submit a final declaration at the end of the year.
The goal is to reduce tax errors and bring the UK tax system closer to real-time. For many self-employed people, it’s also a prompt to get their bookkeeping in order.
Who Does MTD ITSA Affect and When?
- From April 2026 — Self-employed individuals and landlords with gross income over £50,000
- From April 2027 — Those with gross income over £30,000
- A later date (TBC) — Those with gross income over £20,000
‘Gross income’ means total income before expenses — so if you earn £55,000 but your profit is £30,000, you’d still fall into the April 2026 cohort.
What Changes Under MTD ITSA?
Currently: you keep records however you like and submit one Self Assessment return each January.
Under MTD: you must use HMRC-approved software to keep digital records and submit four quarterly updates per year, plus a final end-of-year declaration. The quarterly submissions aren’t full tax returns — they’re summaries of your income and expenses — but they must be submitted on time via software.
What Software Do You Need?
HMRC requires you to use MTD-compatible software. Popular options include QuickBooks, Xero, FreeAgent, and others. Spreadsheets on their own are not acceptable unless you use bridging software. At Simplr Accounting, we set our clients up on the right software and manage submissions on their behalf — so you don’t have to think about it.
What Does This Mean for Content Creators and Online Sellers?
If your gross income exceeds £50,000, you need to be MTD-ready by April 2026. Key implications:
- You’ll need to track income and expenses digitally throughout the year, not just at year-end
- Quarterly submissions mean quarterly deadlines — missing them incurs penalties
- Good bookkeeping habits become essential, not optional
The good news: if you’re already working with a specialist accountant using cloud software, the transition should be seamless.
What Are the Penalties for Non-Compliance?
HMRC is introducing a points-based penalty system for MTD. Each missed submission earns a point; once you reach a threshold, a financial penalty applies. This is separate from late payment penalties. The safest approach is to ensure your accountant manages submissions on your behalf.
Steps to Take Now
- Check whether your gross income exceeds £50,000 (April 2026 threshold)
- If so, speak to an accountant about MTD-compatible software
- Start recording income and expenses digitally now to build the habit
- Review your current bookkeeping — are records accurate and up to date?
Let Simplr Accounting Handle Your MTD Transition
At Simplr Accounting, we’re already preparing our clients for MTD ITSA. As part of our service, we set you up on cloud accounting software, manage your quarterly submissions, and ensure you’re fully compliant. If you’re approaching the £50,000 threshold or already above it, now is the time to get organised.
Get in touch today for a free consultation.
Ready to get MTD-ready?
Making Tax Digital is not optional once the April 2026 deadline arrives. If you want someone to handle your MTD-compatible software, quarterly submissions, and record keeping, that is exactly what we do at Simplr.
→ See our Making Tax Digital service and pricing
You might also find these related guides useful:
→ Making Tax Digital for Yoga Instructors→ Making Tax Digital: What Self-Employed Escorts Need to Know Before April 2026