Making Tax Digital for Income Tax (MTD ITSA) is no longer a future project. Since 6 April 2026, UK sole traders and landlords with qualifying income over £50,000 must keep digital records and send HMRC a summary every quarter. The net widens each year, so most self-employed people and landlords will be inside it by 2028.
The good news: MTD rewards exactly what a well-run set of books already does. The bad news: a shoebox of receipts handed to an accountant in January no longer works.
Who is in, and when
| Qualifying income | MTD mandatory from |
|---|---|
| Over £50,000 | 6 April 2026 (already live) |
| Over £30,000 | 6 April 2027 |
| Over £20,000 | 6 April 2028 |
“Qualifying income” is your gross self-employment and property income added together, before expenses. A landlord with £22,000 of rent and a freelancer side income of £10,000 is at £32,000, not their profit figure.
What actually changes
- Digital records. Every income and expense transaction must be recorded in MTD-compatible software (for example Xero, QuickBooks or FreeAgent), or in spreadsheets connected through bridging software.
- Four quarterly updates. Due by 7 August, 7 November, 7 February and 7 May.
- A final declaration after the year ends, still due by 31 January, which replaces the old Self Assessment return for these income sources.
- Penalty points for late submissions, building up to a financial penalty if deadlines are missed repeatedly.
A readiness checklist
- Work out your qualifying income from your last return so you know which April applies to you.
- Separate business and personal banking. One business account makes bank feeds and reconciliation simple.
- Choose software and connect bank feeds. Set up categories that match the HMRC expense headings.
- Agree a monthly routine. Reconcile the bank every month, not every quarter. Quarterly updates then take minutes.
- Keep digital copies of receipts attached to the transaction they support.
- Decide who submits. Your accountant or agent can submit on your behalf once authorised with HMRC.
Where a remote bookkeeper fits
MTD splits the work into two parts: keeping clean records all year, and the tax judgement at year end. The first part is routine, repeatable and well suited to a remote bookkeeper working inside your Xero or QuickBooks file. The second part stays with your UK accountant or tax agent.
That is the arrangement I offer UK clients: monthly reconciliation, categorisation and receipt matching, plus a quarter-end pack your agent can review and submit. Your accountant spends their (more expensive) time on advice rather than data entry.
If your records are reconciled monthly, MTD is a non-event. If they are reconciled once a year, MTD will feel like four tax returns.
Next step
If you are approaching the £30,000 or £20,000 thresholds, the year before you join is the best time to fix your bookkeeping. Send me a message with how you keep records today and I will tell you what needs to change.
Quick answers
Who has to use Making Tax Digital for Income Tax?
Sole traders and landlords whose combined gross self-employment and property income is over £50,000 have been in since 6 April 2026. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028.
When are MTD quarterly updates due?
Updates are due by 7 August, 7 November, 7 February and 7 May, covering the quarters ending 5 July, 5 October, 5 January and 5 April.
Muhammad Najam Abbas
Director & Chief Consultant, Phase Consulting. CMA Finalist with 15+ years in financial operations, ERP implementation and tax compliance at multinational companies and corporate groups.