Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) is an HMRC initiative aimed at modernising the UK tax system. From April 2026, self-employed individuals and landlords will be required to keep digital records and submit their tax information using HMRC-approved software such as Xero, QuickBooks, TaxCalc, and others.
Rather than submitting a single annual Self Assessment tax return, you will need to provide quarterly digital updates throughout the year, followed by a final declaration at the end of the tax year. This ensures HMRC has up-to-date information on your income and expenses.
Key Dates to Remember
- April 2026 – MTD for Income Tax (ITSA) mandatory for those with income over £50,000
- April 2027 – MTD for Income Tax extends to individuals earning over £30,000
Who Is Affected?
If you are self-employed or receive rental income with a gross annual income exceeding £50,000, you must comply with MTD for Income Tax starting April 2026. Compliance includes:
- Keeping digital records of all income and expenses
- Submitting quarterly updates to HMRC using approved software
- Filing a final declaration at the end of the tax year
It is important to note that quarterly updates are not separate tax returns, but periodic reporting designed to keep HMRC informed continuously throughout the year.
Quarterly Submission Deadlines
You are required to submit four digital updates to HMRC each tax year. These correspond to the following periods and deadlines:
| Period Covered | Submission Deadline |
| 6 April – 5 July | 5 August |
| 6 July – 5 October | 5 November |
| 6 October – 5 January | 5 February |
| 6 January – 5 April | 31 January* |
*The final submission on 31 January is the year-end declaration, covering the entire tax year.
Meeting these deadlines is essential to stay compliant and avoid penalties.
Penalties for Non-Compliance
HMRC has introduced a points-based penalty system for late or missed submissions under MTD:
- Late submissions: Each missed quarterly update results in one penalty point. Accumulating four points leads to a £200 fine, with further penalties for continued non-compliance. Points expire after a compliance period.
- Late payments:
- 0–15 days late: No penalty
- 16–30 days late: 2% penalty on tax owed
- Over 31 days late: Additional 2% penalty plus daily interest
Can You Join Early?
Early voluntary registration for MTD is possible before the mandatory deadline. Early adoption offers several advantages:
- Become familiar with the digital submission process
- Improve the accuracy and timeliness of bookkeeping
- Manage your tax affairs more proactively
- Avoid last-minute complications and penalties
How LDN Financial Can Support You
At LDN Financial, we recognise the challenges involved in adapting to MTD for Income Tax. We use Xero, a cloud-based, HMRC-recognised accounting software, to simplify record-keeping and submissions. Our dedicated team will:
- Set up and manage your Xero account
- Help maintain accurate digital records
- Submit quarterly updates to HMRC on your behalf
- File your final year-end declaration
- Provide ongoing support and tax planning advice
Whether you want to register early or prepare for the 2026 deadline, we will guide you every step of the way to ensure full compliance and reduce your administrative burden.
Get Ready Today
Don’t wait until the deadline. Prepare now for Making Tax Digital for Income Tax with LDN Financial. We will make your transition seamless, keep you informed of updates and deadlines, and ensure your tax affairs remain fully compliant.
Contact LDN Financial today to discuss how we can support your Making Tax Digital journey.
