Tax Changes from April 2026 - Making tax digital for self employed
From April 2026 it will effect those earning over £50,000 for the 2024 to 2025 tax year
From April 2027 it will effect those earning over £30,000 for the 2025 to 2026 tax year
From April 2028 it will effect those earning over £20,000 for the 2026 to 2027 tax year
In a nutshell:
- You’ll still have just one tax return a year, but you’ll need to submit your ‘expected’ earnings to HMRC every 3 months
- You have to have a submit the figures via accounting software (like Xero or QuickBooks)
- It will be cumulative, for example: the first quarter will cover the first 3 months of April-June. The second update will cover 6 months from April-Sept. The third update will cover 9 months of April-Dec, and the fourth update will be the 12 months of April-March. Your accountant will then do a final fifth submission which is will be the ‘final declaration’ to confirm the figures for the year. This is what your final tax bill will be calculated on.
- The payment deadlines of 31 January and 31 July will remain the same. You will not be required to make further payments during the year. In this respect, you will not feel any difference in the way you actually pay your tax. The scheme is simply a reporting excersize of what you ‘think’ you’ll be declaring that year.
- Yes, you can still continue using spreadsheets for your accounting – but you will need to sign-up to for software to submit the returns.
- You can make the submissions yourself (you don’t need to use a bookkeeper) but you will need to set-up accounting software and link it to your online HMRC self-assessment account, via the MTD portal.
- You can also give your figures to your bookkeeper/accountant, and they will submit the figures for you.
Dates & Deadlines
Each quarter, you’ll need to submit to figures for the whole year, cumulatively, up to that point.
The first quarter will cover the first 3 month period of April-June. The second update will cover 6 months from April-Sept. The third update will cover 9 months of April-Dec, and the fourth update will be April-March.
Your accountant will then do a fifth submission which is will be the ‘final declaration’ to confirm the figures for the year.
You will have a deadline of 1 month and 7 days to submit each quarter.
Quarter 1 06 Apr 2026 to 05 July 2026 = due by 07 Aug 2026
Quarter 2 06 Apr 2026 to 05 Oct 2026 = due by 07 Nov 2026
Quarter 3 06 Apr 2026 to 05 Jan 2027 = due by 07 Feb 2027
Quarter 4 06 Apr 2026 to 05 April 2027 = due by 07 May 2027
Final Declaration Year ending 05 April 2027 = due by 31 Jan 2028
Further Info
The full name of the scheme is called ‘MTD for ITSA’ and it stands for Making Tax Digital for Income Tax Self-Assessment.
Link to the full HMRC guidance is here.
- Unless you are exempt then it will be mandatory.
- You cannot file the submission directly on HMRC website. You must use compliant software.
- The scheme was originally due to take effect from 2024, but it was delayed until 2026.
- In general, the professional accounting community is concerned about the introduction of the scheme and the impact it will have on the self-employed. See article here from by ICAEW dated March 2025.
Frequently Asked Questions
How much is this going to cost me?
You will need to buy a subscription to an MTD ITSA compliant software. Xero, QuickBooks & FreeAgent have packages starting at approx. £10 pcm + VAT. There are others out there. Different bookkeepers use different software so its worth shopping around.
I use a spreadsheet. Can I carry on this way?
Yes, there are available options for submitting via a spreadsheet if that’s your preference – like this one. You will still need to pay for the software and link it to your online HMRC account.
Can I do it myself?
If you’ve been doing your own bookkeeping and wish to continue doing so, then yes, you can make your own MTD ITSA submissions via the software.
Can you show me how?
Yes, we offer training packages if you’d like to learn how to do it yourself.
How much do you charge to do it all?
If you’d like to use a bookkeeping service for peace of mind, then our packages start at £150 per month which will include having your monthly bookkeeping done, your software subscription and MTD submissions.
I’m a sole trader. My earnings for the last tax year were £35,000. When do I need to start using this new scheme?
Those who have earnings over £30,000 will need to start making MTD for ITSA submissions from April 2027 onwards. Your first submission will be for the period 06 April 2027 – 05 July 2027, due by 07 August 2027.
I’ve got a paid job with a company, but I earn extra income from a rental property. Do I still need to submit the new way?
Yes, as you are a landlord, you will need to declare earnings from property rentals. If your earnings from property are over £50,000 you will need to start making MTD for ITSA submissions from April 2026.
I'm VAT registered. Is this an extra thing I have to do?
I am a tax resident in Spain. I have a self-employed income which I declare in Spain, but I also have an income from a UK property.
The UK property income will be assessed as UK earnings. If this is over £50,000 you will need to start making MTD for ITSA submissions from April 2026.
Who is exempt from the scheme?
The exemption for individuals who are digital excluded will continue to apply in the same way that the exemption applies for MTD for VAT. This exemption applies to those who cannot use digital tools due to reasons such as age, disability, location, or religious beliefs. Exemptions may also be granted for other valid reasons on a case-by-case basis.
