What MTD for Income Tax actually is
Making Tax Digital for Income Tax (MTD ITSA) replaces the annual Self Assessment ritual for those in scope with three things: digital records kept in compatible software, quarterly summary updates sent to HMRC, and a final declaration after the year end where you confirm everything and pay.
The tax itself does not change. Your allowances, rates and reliefs are the same. What changes is that HMRC sees a rolling picture of your income and expenses during the year instead of one summary in January.
Who is in scope, and when
The first phase began in April 2026, covering sole traders and landlords with qualifying income above £50,000. April 2027 brings in those above £30,000, with a lower threshold following after. Income from employment alone does not put you in scope: it is your self-employment and property income that counts.
Signing up is required once you meet a threshold, though some taxpayers can join voluntarily earlier. If your circumstances change across a threshold, HMRC's guidance on the exact sign-up timing applies.
The quarterly rhythm
Quarterly updates cover roughly the calendar quarters, with deadlines about a month and a few days after each quarter ends. An update is a summary of income and expenses to date, not a payment or a final calculation. You can also choose to send updates more often if that suits your bookkeeping.
After the fourth update you complete the final declaration, which is where allowances and adjustments are applied and the year's tax is finally computed. Any tax due follows the existing payment deadlines.
How to prepare
If you are likely to be in scope, the practical work is choosing compatible software and building the habit of up-to-date digital records. Starting your bookkeeping in MTD style before you must, quarterly-reviewed and receipt-backed, means the first mandated quarter is routine rather than a learning curve.
MyTaxFiling supports digital record-keeping and MTD-ready tracking for sole traders and landlords, so your records are in the right shape whichever phase catches you.