Making Tax Digital for ITSA

What is Making Tax Digital for Income Tax?

From April 2026, HMRC are introducing a new reporting system where quarterly submission will be required. The purpose of MTD is to enable HMRC to encourage digital record keeping to reduce errors and provide taxpayers with an estimate of the tax due for the year.

When will MTD apply to you?

MTD for Income Tax is being introduced in phases, based on your total qualifying income (before expenses are deducted):

  • April 2026 - Income over £50,000

  • April 2027 - Income over £30,000

  • April 2028 - Income over £20,000

If you start earning qualifying income during a tax year, HMRC may estimate your annual income to determine whether you meet the threshold.

For jointly owned rental properties, only your share of the income is considered.

Quarterly Reporting Explained

Under Making Tax Digital for Income Tax, individuals must send HMRC an update every quarter. These quarterly submissions give a summary of income and expenses, allowing HMRC to see an up‑to‑date picture of a taxpayer’s position. The default reporting periods follow the tax year, and each update has to be filed within one month of the quarter-end. The key submission dates are:

  • Quarter 1: 6 April – 5 July (deadline: 7 August)

  • Quarter 2: 6 April – 5 October (deadline: 7 November)

  • Quarter 3: 6 April – 5 January (deadline: 7 February)

  • Quarter 4: 6 April – 5 April (deadline: 7 May)

At the end of the tax year, a Final Declaration is required, which replaces the traditional Self Assessment return. This includes all income sources, not just those reported in quarterly updates.

Tax Payment Dates

Although reporting is changing, payment deadlines remain the same as the current Self Assessment system:

  • 31 January – final payment for the previous tax year
  • 31 January & 31 July – payments on account for the following year

Please contact C-Bas to discuss in further detail so we can advise the best route for you.

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