Get MTD-ready before the deadline
HMRC is requiring digital record-keeping and quarterly reporting for self-employed individuals and landlords. ClearPath helps you prepare and stay compliant — without the last-minute pressure.
Who MTD applies to
MTD for Income Tax applies to sole traders, landlords and those with both types of qualifying income, based on HMRC’s phased income thresholds.
What changes under MTD
- Keep digital records using compatible software
- Submit quarterly updates to HMRC
- Complete year-end adjustments and final declarations
- Maintain a cleaner, more regular reporting rhythm
Why acting early matters
Setting up early avoids last-minute pressure and gives you time to choose the right software and process. While HMRC won’t apply penalty points in year one for late quarterly updates, tax return and payment deadlines still apply.
Need help getting MTD-ready?
Book a free call and we’ll map out the simplest route to compliance for your situation.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is a fundamental change to how self-employed individuals and landlords report their income to HMRC. Instead of filing a single annual Self Assessment tax return, you'll be required to keep digital records and submit quarterly updates to HMRC throughout the year.
The change is designed to make the tax system more accurate and efficient — giving both taxpayers and HMRC a clearer, more up-to-date picture of income and tax positions throughout the year rather than all at once in January.
While the concept is straightforward, the practical implications are significant. You'll need compatible software, a new record-keeping routine and an understanding of what each quarterly submission requires. Starting early makes the transition far less disruptive.
How MTD for Income Tax will work in practice
Digital record-keeping
All income and expenses must be recorded digitally using HMRC-compatible software. Spreadsheets alone won't be sufficient — you'll need software that can communicate directly with HMRC's systems.
Quarterly updates
Every three months you'll submit a summary of your income and expenses to HMRC. These updates don't trigger an immediate tax payment — they build a running picture of your position throughout the year.
End of period statement
At the end of the tax year you'll complete an End of Period Statement (EOPS) for each income source, making any final adjustments to your figures before the year is closed off.
Final declaration
The Final Declaration replaces the traditional Self Assessment return. It confirms your total income from all sources and calculates your final tax liability for the year.
When does Making Tax Digital apply to you?
MTD for Income Tax is being introduced in phases based on income level. The thresholds refer to your qualifying income — broadly, your self-employment turnover plus rental income — in a previous tax year.
April 2026
MTD applies to sole traders and landlords with qualifying income above £50,000. If this is you, you need to be ready now — the April 2026 deadline is closer than it appears.
April 2027
The threshold drops to £30,000. Sole traders and landlords earning above this level will need to be fully set up with compatible software and a quarterly reporting process in place.
April 2028
MTD extends to those with qualifying income above £20,000. At this point, the vast majority of self-employed individuals and landlords in the UK will be within scope.
What software do you need for MTD?
To comply with MTD for Income Tax, you'll need software that is recognised by HMRC and capable of submitting quarterly updates directly to HMRC's systems. A standard spreadsheet or paper records will not be sufficient on their own.
The right software depends on how you work. For most self-employed individuals and landlords, a straightforward app or cloud accounting tool that connects to HMRC is all that's needed. The key features to look for are: HMRC recognition for MTD for ITSA submissions, the ability to categorise income and expenses easily, and clear quarterly summary views.
ClearPath can advise you on the most practical and cost-effective option for your situation — avoiding unnecessary complexity or expense. For many clients, a simple low-cost tool linked to their bank account is all that's required.
MTD myths and misunderstandings
"I'll have to pay tax four times a year"
Not true. Quarterly updates are information submissions only — they don't trigger tax payments. You still pay tax through the existing payment schedule: 31 January and 31 July each year.
"My spreadsheet will be fine"
A standard spreadsheet won't meet MTD requirements on its own. You'll need HMRC-compatible software to submit quarterly updates — though some bridging tools can connect spreadsheets to HMRC's system.
"It only applies to big businesses"
MTD for Income Tax is specifically aimed at sole traders and landlords — individuals, not companies. By 2028, anyone with income above £20,000 from self-employment or property will be in scope.
"I can sort it out nearer the time"
Waiting until the deadline creates unnecessary pressure. Getting set up early means you can choose the right software calmly, build a comfortable record-keeping routine and avoid mistakes in your first quarterly submission.