What's Actually Changing in April 2026
From 6 April 2026, Making Tax Digital for Income Tax Self Assessment (MTD ITSA) becomes mandatory for sole traders and landlords whose qualifying income exceeds £50,000 for the 2024-25 tax year. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028 — so even if you're not in scope this year, you almost certainly will be soon.
In practical terms, this means:
- No more annual spreadsheet-and-shoebox tax returns. Records must be kept digitally in MTD-compatible software.
- Four quarterly updates per year sent direct to HMRC from your software.
- A final declaration at year end that replaces the traditional Self Assessment return.
- Penalties for late submissions on a new points-based system.
Who's In Scope on Day One
You must comply from April 2026 if all of the following are true:
- You're a sole trader, landlord, or both
- Your gross qualifying income (turnover, not profit) for 2024-25 was over £50,000
- You're already in the Self Assessment system
Partnerships and limited companies are not affected by this April 2026 wave.
What "Digital Records" Actually Means
HMRC are stricter than people realise. A spreadsheet alone is not sufficient unless it's bridged to MTD-compliant software using digital links — no copy-paste, no retyping. Acceptable approaches include:
- Accounting software (Xero, QuickBooks, FreeAgent, Sage) used end-to-end.
- Bridging software that pulls structured data from your spreadsheet and submits it.
- Lightweight MTD-only tools that connect bank feeds and submit quarterly updates.
The common failure mode is keeping records in a spreadsheet, then manually re-entering totals into submission software. That breaks the digital-link rule.
The Quarterly Submission Calendar
For the 2026-27 tax year, your quarterly update deadlines are:
| Quarter Covered | Submission Deadline |
|---|---|
| 6 Apr – 5 Jul 2026 | 7 Aug 2026 |
| 6 Jul – 5 Oct 2026 | 7 Nov 2026 |
| 6 Oct – 5 Jan 2027 | 7 Feb 2027 |
| 6 Jan – 5 Apr 2027 | 7 May 2027 |
| Final declaration | 31 Jan 2028 |
Quarterly updates are cumulative totals, not snapshot values, and they don't have to be perfect — adjustments happen at the final declaration. The point is to give HMRC visibility throughout the year.
A Practical 6-Step Readiness Checklist
1. Confirm whether you're in scope
Add up your 2024-25 self-employment turnover plus your gross rental income. If it crosses £50,000, you're in.
2. Pick MTD-compatible software now (not in March 2026)
HMRC publishes a list of recognised software. Pick one in autumn 2025 and run it in parallel with your current process for a quarter — don't wait for the deadline to discover a workflow problem.
3. Connect your bank feeds
Bank-feed integration is the single biggest time-saver. Most MTD tools support Open Banking with HSBC, Barclays, Lloyds, NatWest, Santander and the major challenger banks.
4. Categorise your income correctly
Self-employment and property income are reported as separate trades. If you're both a sole trader and a landlord, you'll submit quarterly updates for both, separately.
5. Sign up via your HMRC Government Gateway
You don't get auto-enrolled — you (or your accountant) must actively sign up your business for MTD ITSA via gov.uk. Do this at least four weeks before your first quarterly deadline.
6. Plan your record-keeping cadence
The biggest behavioural shift is moving from "annual panic" to "monthly tidy-up". Block 30 minutes a fortnight to categorise transactions and reconcile your bank feed. It's a tiny investment that prevents quarter-end pain.
Common Pitfalls We See
- Treating the £50,000 as profit — it's gross turnover. Many higher earners assume they're out of scope when they're not.
- Spreadsheet without bridging software — fails the digital-link test, even if your sums are perfect.
- Leaving sign-up until March — Government Gateway authorisations can take days to propagate.
- Forgetting joint property income — your share of jointly-owned rental income still counts toward your threshold.
How Regulas Helps
Regulas is our MTD-ready bookkeeping and compliance platform built for UK sole traders, landlords and micro-businesses. It handles bank-feed reconciliation, quarterly HMRC submissions, and the final declaration in a single workflow — with a free tier for businesses under the threshold so you can get the muscle-memory in place before you're forced to.
If you'd rather talk it through with a human first, get in touch — we'll happily walk you through whether you're in scope and what the cleanest path looks like for your situation.
Holding crypto alongside your sole-trader or rental income? The MTD ITSA threshold counts only your qualifying self-employment and property income — cryptoasset disposals are a separate CGT matter. Our companion piece, Crypto Accounting in the UK 2026: A Plain-English Overview, walks through how the two interact.
This article is informational, not tax advice. For your specific circumstances, speak to a qualified accountant.