Making Tax Digital for Income Tax
From 6 April 2027, sole traders and landlords with qualifying income over £30,000 must follow Making Tax Digital for Income Tax. Qualifying income is your self-employment turnover plus your property income. The first quarterly update for 2027-28 is due 7 August 2027.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is HMRC's move to bring self-employment and property income reporting into a fully digital system. Instead of one annual Self Assessment return, you'll keep digital records and file quarterly updates through MTD-compatible software.
The first phase started on 6 April 2026 for qualifying income over £50,000. The big change is next: from 6 April 2027 the threshold drops to £30,000, then to £20,000 from 6 April 2028. If your self-employment turnover plus property income is over £30,000, now is the time to plan.
Who's affected from April 2026?
HMRC uses gross income from the 2024/25 tax year to decide who joins the first phase.
You're in scope if…
- Qualifying income = self-employment turnover plus property income (before expenses)
- Over £50,000: in MTD from 6 April 2026
- Over £30,000: in MTD from 6 April 2027
- Over £20,000: in MTD from 6 April 2028
Not affected (for now)
- Limited companies (separate MTD rules apply)
- Partnerships (deferred to a later date)
- Qualifying income of £20,000 or less (not yet in scope)
- PAYE-only earners with no self-employment or rental income
The HMRC rollout timeline
MTD ITSA is being introduced in phases based on income level.
Sole traders and landlords with qualifying income over £50,000 join MTD ITSA.
Sole traders and landlords with qualifying income over £30,000 join. The first quarterly update for 2027-28 is due 7 August 2027.
Extended to those with qualifying income over £20,000.
What actually changes for you
The single annual Self Assessment return is being replaced with a rolling digital process:
- Digital record keeping - no more spreadsheets alone
- Four quarterly updates submitted to HMRC each tax year
- Final Declaration by 31 January, replacing the traditional Self Assessment
- MTD-compatible software required (e.g. Sage)
HMRC deadlines are the 7th of the month following each quarter, miss one and penalties apply under the new points-based regime.
How Sage handles MTD for Income Tax
Bee Motion is a Sage-Only Practice, every client is set up on Sage's HMRC-recognised platform. That means the quarterly updates, digital record keeping and Final Declaration are handled inside one system, reviewed by your dedicated account manager before submission.
- HMRC-recognised for MTD ITSA submissions
- Automatic quarterly update reminders
- Bank feeds that categorise transactions in real time
- Digital audit trail, HMRC-compliant record keeping
- One dashboard for self-employment and rental income
- Direct filing of quarterly updates & Final Declaration
Prepare now for April 2027
The businesses that transition to MTD ITSA calmly are the ones that started 6–12 months early. If your qualifying income is over £30,000, book a free proposal meeting and we'll map your route onto Sage before HMRC's deadline.
This guide is provided for general information and reflects HMRC's published rollout at the time of writing. Thresholds, deadlines and rules may change, always confirm your position with a qualified adviser.
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