Making Tax Digital for income tax and self-assessment (MTD for ITSA): What Landlords and Sole Traders need to know about April 2026

From April 2026, Making Tax Digital (MTD) will be introduced for landlords and/or sole traders with qualifying income (business turnover and/or gross rents, combined) above £50,000. This represents a significant shift in how income and expenses will be reported to HMRC, moving away from traditional annual tax returns to quarterly digital submissions. If qualifying income is below £50,000 in 2024/25, preparation can be made for MTD for ITSA, but changes won’t come into effect until a later date.

Those with VAT-registered businesses will already be familiar with MTD – which has applied to VAT for a few years now – but there will be differences and additional submissions to make under MTD for ITSA

What does this mean for you?

Under MTD for ITSA, you'll need to maintain digital records of your income and expenditure from each MTD-able source and submit quarterly updates to HMRC using compatible software. Rather than completing a single, annual self-assessment tax return, you'll provide regular updates throughout the year, with a final declaration the   – making five submissions in total for those with one MTD-able activity, and four more quarterly submissions for each additional source. UK rental activity (regardless of the number of properties), overseas rental, and each sole trade,  must have separate quarterly submissions to HMRC.

Example scenario:

For example, if you operate property, consultancy and farming businesses, three submissions will be required, every quarter, plus any relevant VAT returns. The change is designed to make tax administration more efficient and reduce errors, but we understand it can feel daunting. The key requirement is to use MTD-compatible software to keep your records and submit your quarterly and annual returns.

Exemptions

There can be exemption from MTD for ITSA, but the criteria HMRC will accept are quite restricted in practice. We can discuss potential exemption with you, if you feel it is wholly impractical for you to use digital tools.

What support can you access?

MTD-compatible software will help you to a certain degree, if you’re happy to keep records and make submissions yourself. Others will need more support from professionals.

We’re prepared for these changes with the team at Simpkins Edwards ready to support clients through this transition. We understand every business operates differently - whether you need full bookkeeping support, training to manage your own digital records, or somewhere in between, we'll work with you to find an approach that suits your circumstances. We can recommend suitable software, help you transition your existing records, and ensure you're fully compliant from day one.

The April 2026 deadline may seem distant, but early preparation is essential for a smooth transition. Get in touch with our team to discuss how we can support your move to MTD.