Making Tax Digital for Income Tax: it's here, and your first deadline is August
If you're a sole trader, a landlord, or some combination of the two, this is the bit of HMRC admin you've probably been pretending wasn't going to happen. Making Tax Digital for Income Tax Self Assessment — MTD ITSA if you're into acronyms, "that quarterly thing" if you're not — went live on the 6th of April. The threats are over. The thing is real. And your first quarterly update is due on the 7th of August, which is roughly twelve weeks from now.
The good news: it is genuinely less scary than the headlines suggest. The slightly less good news: you do actually have to do something about it. Here's the honest version.
Are you actually in scope?
The first thing to work out is whether MTD ITSA applies to you at all. The rule for this April 2026 cohort is simple in principle: if your gross income from self-employment plus property was more than £50,000 in your 2024/25 tax return, you're in. Note the word gross. Not profit. Not net. The headline turnover before any expenses. So if you're a sole trader plumber turning over £45,000 with a small rental flat bringing in £8,000, you're in — because £45,000 plus £8,000 is £53,000, which is more than £50,000.
Both businesses then sit inside MTD. There isn't an option to MTD one and ignore the other.
If you're below £50,000 for now, you've bought yourself either one or two years of breathing room. The £30,000 cohort joins from April 2027, and the £20,000 cohort from April 2028. So almost every UK landlord and sole trader who files a self-assessment will be in scope within the next 24 months. If you'd rather get the software pain over with sooner, you can opt in early — and honestly, knowing what's coming, that's not the worst idea.
Partnerships have been kicked into the long grass indefinitely. If your only self-employment income is a partnership share, you're not in MTD ITSA yet, and HMRC hasn't given a date. But if you're a partner and you have a rental flat earning over the threshold, the rental side gets dragged into MTD — same rule as above.
What's actually changed?
Under the old system, the rhythm was annual. You collected receipts all year, panicked about them in early January, and filed one big self-assessment return by midnight on the 31st. One submission, one deadline, one collective national meltdown.
Under MTD ITSA, that one annual filing becomes five separate submissions a year per business: four quarterly updates plus a final declaration. The quarterly updates are simpler than a full return — they're summaries of income and expenses from your digital records — but they're real submissions to HMRC with real deadlines.
You also need to keep digital records. No more shoebox of receipts. Each transaction has to be recorded in MTD-compatible software, ideally as it happens rather than reconstructed nine months later in a state of panic.
The new rhythm
The four quarterly deadlines are fixed, and they apply to everyone in scope. Submissions are due on the 7th of August, 7th of November, 7th of February and 7th of May, covering the previous three months of trading and property income. (You can elect to use calendar quarters if you'd rather align with the months — that adds five days to each deadline.)
So if you're in the April 2026 cohort, here's what's coming at you:
Quarter 1 (April 6 to July 5, 2026) — submission due 7 August 2026
Quarter 2 (July 6 to October 5, 2026) — submission due 7 November 2026
Quarter 3 (October 6, 2026 to January 5, 2027) — submission due 7 February 2027
Quarter 4 (January 6 to April 5, 2027) — submission due 7 May 2027
Final Declaration — due 31 January 2028
That final declaration is where you pull everything together, add anything that wasn't on a quarterly update (capital gains, gift aid, the bits and pieces), and confirm your total tax position. It replaces the self-assessment return you used to do every January, and it lands on the same date you're used to. So at least there's that.
Software: what you need
MTD ITSA is built around digital record keeping, which means you need MTD-compatible software. HMRC publishes a list, and the names you'll recognise on it include QuickBooks, Xero, FreeAgent, Sage and a stack of smaller alternatives. You can also use bridging software with a spreadsheet — but bridging software has rules of its own and isn't usually the easier path.
If you're starting from scratch, our genuine recommendation is QuickBooks. We're a QuickBooks Pro Partner, which means we can get you a discounted licence and set up your chart of accounts properly so you're not paying for a tool you can't navigate. Day one looks like: open the app, snap a photo of a receipt, done. Quarter end looks like: review the auto-generated summary, confirm it, submit. It's genuinely less work than what you've been doing in January.
What happens if you don't bother?
HMRC has implemented a points-based penalty regime for late MTD submissions. Each missed quarterly update gives you a point. Get to four points within a rolling 24-month window and you start collecting £200 penalties for each subsequent late submission.
There's one piece of mercy: HMRC has said that points won't be issued for quarterly updates in this first year of mandation. So if you miss a Q1 submission in August 2026, you get a strongly-worded letter rather than a points strike. But that grace period ends in April 2027, and the final declaration penalties are in force from day one. Don't take the year-one leniency as permission to wait until 2027 to figure this out.
What you should do this month
If you're confirmed in scope and you haven't already:
Sort out your software. Pick one, get it set up properly with your bank feeds connected, and start using it for everything from April 6 onward. The longer you wait, the more painful Q1 catch-up becomes.
Tell HMRC. There's a sign-up step where you formally enrol your business(es) into MTD ITSA. If you're working with an accountant, they handle this for you.
Decide how you want to handle the quarterly rhythm. Some sole traders are perfectly happy doing it themselves with good software. Others would rather hand the whole thing to an accountant and stop worrying about it. Both are valid. The wrong answer is to do nothing and discover the rhythm halfway through October when you've ignored four months of receipts.
If you're in Hull, East Yorkshire, or anywhere else in the UK and you'd rather not figure this out alone, that is what we do all day. We get you set up on QuickBooks at a discounted rate, file your quarterly updates for you, and do the final declaration as part of your self-assessment package. Fixed monthly fee, no surprises, one named contact who actually picks up the phone.
Book a 15-minute chat and we'll work out what your year-one MTD ITSA setup actually costs you. No pressure, no jargon, no sales pitch — just an honest assessment of your situation.
Rich Port is an ICAS Chartered Accountant and the founder of Port Accounting Services in Hull