The basics
What is MTD ITSA?
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is one of the biggest changes to UK tax in a generation. It changes how self-employed people and landlords report their income to HMRC.
Right now, most people submit one Self Assessment tax return a year. Under MTD ITSA, you'll instead keep digital records and send HMRC an update every quarter — four times a year — followed by a final declaration to confirm your figures.
In a nutshell: One annual tax return becomes four quarterly updates plus a year-end declaration, all submitted digitally through compatible software.
The goal, according to HMRC, is to make tax reporting more accurate, more up-to-date, and fully digital. For many people, though, it simply means more deadlines to manage — which is exactly the problem Quarterly was built to solve.
Eligibility
Who needs to comply with MTD ITSA?
MTD ITSA applies to self-employed individuals and landlords whose total qualifying income is above certain thresholds. It's being rolled out in stages, starting with higher earners.
| Your annual income | MTD ITSA starts |
|---|
| Over £50,000 | 6 April 2026 |
| £30,000 – £50,000 | 6 April 2027 |
| £20,000 – £30,000 | April 2028 (announced) |
| Under £20,000 | Not yet required |
Your "qualifying income" is your total gross income from self-employment and property combined, before expenses. So if you earn £30,000 from self-employment and £25,000 from rental property, your qualifying income is £55,000 — putting you in the April 2026 group.
Not sure which group you're in? Use our free 60-second checker to find out exactly when MTD ITSA applies to you and what your deadlines are.
Deadlines
Key dates & deadlines
Once you're in MTD ITSA, you'll have four quarterly deadlines each year, plus a final declaration. The quarters follow the tax year, which starts on 6 April.
Each quarterly update summarises your income and expenses for that period. The final declaration (due by 31 January after the tax year ends) is where you confirm your full-year figures and any adjustments — this replaces the old Self Assessment return.
The good news: with Quarterly, you never have to track these dates yourself. We prepare and file every submission for you, on time, automatically.
The process
How MTD ITSA works
Here's the full cycle, step by step:
- Keep digital records — every item of income and expense is recorded digitally as you go, using MTD-compatible software.
- Submit quarterly updates — four times a year, a summary of your income and expenses is sent to HMRC.
- Receive estimates — after each update, HMRC can show an estimate of the tax you'll owe, so there are no year-end surprises.
- Final declaration — at year-end you confirm your figures, claim any reliefs, and finalise your tax position.
- Pay your tax — your payment deadline (31 January) stays the same as it is now.
Important: MTD ITSA changes how often you report, not when you pay. Your tax is still due by 31 January as normal.
Requirements
Keeping digital records
Under MTD ITSA, paper records and manual spreadsheets alone are no longer enough. You must keep digital records of your business income and expenses, and submit them through HMRC-recognised software.
Your digital records need to include:
- The amount of each income and expense
- The date of each transaction
- The category it falls into (e.g. sales, travel, office costs)
This is where many people feel overwhelmed — but it's also where a service like Quarterly removes the burden entirely. We handle the digital record-keeping and software for you, so you don't need to learn any new systems.
Penalties
What happens if you miss a deadline?
HMRC uses a points-based penalty system for MTD ITSA. Rather than an immediate fine, you accumulate points for each missed deadline.
| What happens | Result |
|---|
| Each missed quarterly deadline | 1 penalty point |
| Reaching 4 points | £200 fine |
| Each further miss after 4 points | Another £200 fine |
Points do eventually expire if you stay compliant — but the system is designed to catch repeat offenders. The simplest way to avoid penalties altogether is to never miss a deadline in the first place.
The first-year "soft landing": For those who joined in April 2026 (the £50,000+ group), HMRC isn't issuing penalty points for late quarterly updates during the first year, 2026/27 — giving everyone time to adjust. The full points system applies from 2027/28. Important: this soft landing does not cover your year-end final declaration or late tax payments, which follow the normal penalty rules from day one.
Peace of mind: Quarterly's whole purpose is to make sure you never miss a deadline. We track every date and file on time, every time — so penalty points simply aren't a worry.
Getting ready
How to prepare for MTD ITSA
Even if your start date is still a while away, getting ready early means a smooth transition. Here's how:
- Check when it applies to you — use our free checker to confirm your start date.
- Start keeping digital records now — the sooner you're in the habit, the easier it is.
- Choose how you'll comply — either learn MTD software yourself, or let a service handle it for you.
- Get authorised representation — an agent (like us) can file on your behalf so you don't have to.
- Relax — with the right setup, MTD ITSA becomes a non-event.
The easiest path: Sign up with Quarterly and we take care of all five steps for you — for £100 + VAT a quarter.
FAQ
Common questions
Does MTD ITSA replace Self Assessment?
For those it applies to, yes — your four quarterly updates plus a final declaration replace the single annual Self Assessment return.
What if I have both a job and self-employment?
MTD ITSA only applies to your self-employment and property income. Your employment (PAYE) income continues to be taxed through payroll as normal.
Do I need special software?
Yes — MTD ITSA requires HMRC-recognised software to submit. With Quarterly, the software is included; you never have to buy or learn anything.
When do I actually pay my tax?
Your payment deadline doesn't change — tax is still due by 31 January. MTD ITSA changes how often you report, not when you pay.
Can someone do all this for me?
Absolutely — that's exactly what Quarterly does. We're registered tax agents who handle your record-keeping, quarterly submissions, and final declaration from start to finish.