MTD ITSA Is Live: Your Action Plan for the Next 90 Days

Making Tax Digital for Income Tax is now live. As of 6 April 2026, sole traders and landlords with qualifying income over £50,000 are required to keep digital records and submit quarterly updates to HMRC.

Your first quarterly update isn't due until 7 August 2026 — so you have around 90 days to get yourself organised. Here's exactly how to use that time.

Week 1: Confirm you're in scope

Look at your last Self Assessment return. Add up your gross income (total turnover, not profit) from self-employment and UK property. If it's over £50,000, you're in scope from now. Below £50,000? You're not in MTD yet — but the threshold drops to £30,000 in April 2027 and £20,000 in April 2028, so it's coming.

If you're unsure whether something counts as qualifying income, the basic test is: would you put it on the self-employment or property pages of a Self Assessment return? If yes, it counts.

Week 2: Sign up for MTD on GOV.UK

You can't submit through any software until you've signed up. Go to GOV.UK and search "Sign up for Making Tax Digital for Income Tax". You'll need your Government Gateway login, your National Insurance number, and your business start date.

HMRC can take a few days to process your sign-up. Don't leave it to August.

Week 3: Get your records into a digital format

If you already keep your books in a spreadsheet, you're done. If you've been using paper notebooks or only loosely tracking via your bank statements, now is the time to move to digital.

You don't need accounting software — a spreadsheet (Excel, Google Sheets, Apple Numbers, LibreOffice) is fine. The only requirement is that records are digital and that you can produce running totals for income and expenses.

Week 4–6: Pick your software and connect

HMRC publishes a list of compatible MTD software. There are roughly 20 options. The main split is between full accounting platforms (Xero, QuickBooks, FreeAgent — typically £15–£35/month) and bridging software that connects your existing spreadsheet to HMRC.

If your records already live in a spreadsheet and you don't need invoicing or bank feeds, free bridging software like Flonancial does the job in minutes. Create an account, connect to HMRC via the official OAuth flow, and you're set up.

Month 2: Practice with the demo

Before your first real submission, walk through the process end-to-end with a demo or test scenario. Most software tools have one. You want to know exactly which buttons you'll press in August before there's any urgency.

While you're at it, set yourself a calendar reminder for 7 August 2026 — your Q1 deadline.

Month 3: Reconcile your Q1 figures

By early July you should have your full Q1 income and expenses recorded. Reconcile against your bank statements. Make sure your spreadsheet totals match what actually came in and went out.

Note: under the cumulative model introduced April 2025, your Q1 submission contains your year-to-date figures from 6 April to 5 July. Your spreadsheet should produce those running totals naturally.

The grace period — and why it doesn't mean "ignore it"

HMRC has confirmed that late submission penalties for quarterly updates are waived for 2026/27. That means if you genuinely struggle this first year, you won't be fined for a late update. However, this does not apply to late tax payments, the Final Declaration, or future tax years. Treat the grace period as breathing space, not a free pass.

You have time

Most of this is genuinely a one-time setup. Spend a couple of evenings this month getting your spreadsheet, sign-up, and software in place, and your future quarterly submissions will take five minutes each. The pain is mostly upfront.