New rules under Making Tax Digital for Income Tax (MTD ITSA) are set to apply from April 2026, it’s worth knowing what this could mean for you.

Making Tax Digital (MTD) for VAT became mandatory in April 2019. Now, HMRC has announced that MTD for Income Tax (known as MTD ITSA) will come into effect from 6 April 2026. This will apply to self-employed individuals and landlords and is designed to help manage tax more efficiently by keeping digital records, submitting quarterly updates to HMRC, and completing a year-end declaration.

These changes will affect a large number of people. To help you prepare, we’ve outlined the key points you need to know below.

 Who will be affected & dates of implementation?

• From 6 April 2026: Self-employed individuals and landlords with total income over £50,000
• From 6 April 2027: Self-employed individuals and landlords with total income between £30,000 and £50,000

If you’re both self-employed and a landlord, your income from both sources is combined.

For example, earning £26,000 from self-employment and £26,000 from rental means your total income is £52,000, which means you’ll need to comply with MTD from April 2026.

A few other things to note:

• If you have more than one self-employed business, you’ll need to keep and submit digital records for each business separately.
• If you own a property jointly, only your share of the income is considered.
• Income from overseas properties must also be reported, but separately from your UK property income.

Your eligibility for MTD in April 2026 will be based on the income shown in your 2024/25 tax return.

What are the requirements for filing and when?

If you're affected by MTD for Income Tax, you'll need to:

• Keep digital records of your income and expenses
• Submit four quarterly updates to HMRC each year
• Submit a final declaration after the tax year ends

Quarterly updates

You’ll send updates every three months to HMRC. If your accounting year matches the tax year (6 April to 5 April), your deadlines for 2026/27 will be:

• 7 August 2026 – covering 6 April to 5 July
• 7 November 2026 – covering 6 July to 5 October
• 7 February 2027 – covering 6 October to 5 January
• 7 May 2027 – covering 6 January to 5 April

Alternatively, you can choose to report based on calendar quarters instead. If you do, your updates will cover:

• 1 April – 30 June (due 7 August)
• 1 July – 30 September (due 7 November)
• 1 October – 31 December (due 7 February)
• 1 January – 31 March (due 7 May)

Year-end declaration

By 31 January following the end of the tax year, you'll also need to submit a final declaration confirming your figures, including any other income not included in your quarterly updates. This will determine your final tax bill.

You’ll need to use MTD-compliant software (or bridging software) to record and send this information.

Who is exempt from MTD for Income Tax?

• Trusts & Estates including trustees and personal representatives
• Limited companies and partnerships including the individual partners
• Non-resident companies
• Those without a National Insurance Number
• Foster carers
• Those below the threshold for MTD ITSA

Can you claim an exemption?

It may be possible to claim an exemption from MTD ITSA if you believe it is not reasonably practical for you to use digital tools to keep your records and submit the quarterly returns (i.e. due to disability, age, religious beliefs, remoteness of location etc).

If the above does apply, you would need to put in a request to HMRC to apply for the exemption. Further details of how to do this have not yet been supplied, but please get in touch and we can advise accordingly once we know.

Will there be penalties for not complying?

To begin with, HMRC will be more lenient regarding charging penalties and interest for late filing, however, in the long term the plan is to introduce a points-based system similar to those charged for VAT.

Each time a submission is missed, the individual would receive a point and once so many points have been given, a penalty of £200 would be issued.

The threshold has not yet been determined for how many points you need before a penalty is given, however, it is worth trying to keep up to date with submissions.

How can Jerroms support you with this?

If you think you may be affected or HMRC have sent you a letter reminding you about the new MTD for ITSA requirements, please reach out to your Jerroms account Manager who can advise on your specific situation.

We understand these changes may appear quite daunting. Jerroms are here to offer help and advice along the way. We will be offering services to our clients to support the setting up of MTD for ITSA compliant software, completion of the quarterly submissions to HMRC and year-end declaration, together with training for clients who wish to submit their own quarterly updates.

Jerroms can support you through the entire MTD compliance process. With the right tools, preparation and collaboration, Jerroms can help to ensure a smooth transition to MTD for Income Tax.