MTD for Income Tax: What Sole Traders and Landlords Must Do Before April 2026

Making Tax Digital for Income Tax Self Assessment becomes mandatory for sole traders and landlords with income over £50,000 from 6 April 2026. Here's everything you need to know and do right now.

Deadline alert: If your combined income from self-employment and/or property exceeds £50,000, you must be using MTD-compatible software and have signed up with HMRC before 6 April 2026.

What is MTD for Income Tax?

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is HMRC's programme to move income tax reporting from an annual Self Assessment return to quarterly digital updates submitted directly from accounting software. Instead of filing one tax return per year, affected businesses will submit four quarterly updates plus a final declaration annually.

Who is affected and when?

What do you need to do?

If you're affected by the April 2026 deadline, here are the steps you need to take:

1. Choose MTD-compatible software. You must use HMRC-recognised software. QuickBooks, Xero, FreeAgent, and Sage Accounting are all approved. See our full comparison to choose the right one.
2. Sign up with HMRC. You must sign up for MTD for Income Tax through your Government Gateway account before the deadline.
3. Start keeping digital records. All income and expense records must be kept digitally from the start of your first MTD period.
4. Submit quarterly updates. You'll need to submit four quarterly updates per tax year, plus a final declaration replacing your Self Assessment return.

Which software should I choose?

Our top recommendations for MTD for Income Tax compliance are:

• QuickBooks Sole Trader Plus (£10/mo) — cheapest HMRC-recognised option, excellent mobile app
• FreeAgent (£19/mo or free with NatWest/RBS) — best Self Assessment experience, built for sole traders
• Xero (from £16/mo) — best if you work with an accountant

Frequently Asked Questions