Make Tax Digital: Tax Reporting Changes April 2026

MTD for ITSA is a Government initiative to modernise the UK tax system. Compared with much of Western Europe, our tax system is quite out of date. The main objective is to require individuals who submit tax returns to maintain digital records and to submit quarterly returns (mini tax returns). This is being phased in for all, over several years. However, the first and second phases which are going live soon are detailed below and only pulls in those with property income and/or self assessment income. Thresholds are based on gross income and NOT profits.

Will it affect you?

Yes, if by April 2026 your annual combined gross income from self-employment and property* is over £50,000.

Yes, if by 6 April 2027 your annual combined gross income from self-employment and property* is between £30,000 and £50,000

Not yet, if your annual gross income is less than £30,000, or you are in a partnership.

* If you are self-employed and receive property income, the gross annual income figure applies to total gross income from both sources Gross income is income before any deductions (eg property management fees, business expenses etc)

What does it involve?

• Keeping digital records and submitting the information to HMRC via approved software

• Submitting quarterly updates to HMRC - a quarter being 06 April to 05 July - due by 07 August.

• Submitting a final declaration at the year end - basically a tax return which takes the whole year in review.

Key Dates

April 2026 - mandatory registration date for those with gross income over £50,000 

April 2027 - mandatory registration date for those with gross income over £30,000

April 2028 - mandatory registration date for those with gross income over £20,000

Remember the gross income is self employed income and property income only - before expenses are deducted.

What you need to do

Choose software which works for you.  Our preference is Xero, best product available.   We can deal with all set up of Xero from start to finish. Self employed income needs to be recorded separately to property income.

Get in touch to find out more and we can then obtain digital authorisation from HMRC to act for you.

The first quarter end for reporting is the period April to June 2026 - you need to be up and running by then !