Making Tax Digital (MTD) for Income Tax - Threshold Checker & Deadline Calculator
For accountants, bookkeepers, sole traders and landlords - check who is in scope for HMRC's MTD ITSA, when they're mandated, and every quarterly filing deadline from April 2026.
HMRC Making Tax Digital for sole traders and landlords - who needs to comply?
What counts as qualifying income?
MTD ITSA is being phased in from April 2026 for sole traders and landlords based on their qualifying income. Qualifying income is the combined gross self-employment and property income before expenses - this is turnover, not profit.
How does HMRC determine eligibility?
HMRC determines eligibility by looking at the Self Assessment return whose filing deadline falls just before the start of the relevant tax year. For example, 2026/27 eligibility is based on the 2024/25 return, which was due by 31 January 2026.
A sole trader invoicing £38,000 who also earns £15,000 in rental income has qualifying income of £53,000 - and is in scope from April 2026.
Can clients sign up voluntarily?
Clients below the threshold can sign up voluntarily. For accountants managing a practice, this can be a practical way to familiarise clients with quarterly reporting before it becomes mandatory - particularly if their income is trending upward. Bridging software like Aligned makes voluntary sign-up low-risk, since clients can keep their existing spreadsheets.
| Phase | Qualifying Income | Mandated From | Based On Return | Estimated Taxpayers |
|---|---|---|---|---|
| Phase 1 | Over £50,000 | 6 April 2026 | 2024/25 | ~780,000 |
| Phase 2 | Over £30,000 | 6 April 2027 | 2025/26 | ~970,000 additional |
| Phase 3 | Over £20,000 | 6 April 2028 | 2026/27 | TBC |
Source: GOV.UK - Check if you're eligible for Making Tax Digital for Income Tax
The following are not currently required to use MTD ITSA:
- Partnerships - general partnerships are expected to be brought in after sole traders and landlords, but no date has been confirmed. LLPs and mixed partnerships (those with corporate members) have no confirmed timeline.
- Trusts and estates - including charitable trusts, trustees of registered pension schemes, and trustees of exempt unauthorised unit trusts.
- Non-resident companies filing under Self Assessment.
- Foster carers whose only qualifying income is from foster care.
- Individuals with a lasting or enduring Power of Attorney - exempt per the Spring Statement 2025 announcement.
- Lloyd's underwriters - in respect of their underwriting business.
You can apply to HMRC for an exemption if it is not practical for the client to use digital tools - for example due to disability, age, lack of reliable internet, or religious beliefs incompatible with electronic record-keeping. If a client is already exempt from MTD for VAT on digital exclusion grounds, they are automatically exempt from MTD ITSA.
GOV.UK - Find out if you can get an exemption from MTD for Income Tax
MTD ITSA Threshold Checker
Enter your client's gross income to check their MTD ITSA status. No data is stored - everything runs in your browser.
Once mandated, your client must continue using MTD ITSA even if their income falls. They can choose to opt out only after their qualifying income drops below the relevant threshold for three consecutive tax years.
If your client started self-employment or property letting after 6 April 2024 and has not yet filed a Self Assessment return, they will be required to join MTD from the April after their first return is filed - provided their qualifying income exceeds the relevant threshold at that point.
HMRC MTD quarterly filing deadlines for 2026/27, 2027/28 and 2028/29
Under MTD ITSA, sole traders and landlords must submit quarterly updates to HMRC through MTD-compatible software. Each quarterly update is a summary of total business income and expenses for that period - not individual transactions.
Each quarterly update is due by the 7th of the month following the end of each quarter. After Q4, an End of Period Statement (EOPS) and Final Declaration (which replaces the Self Assessment return) are both due by 31 January following the end of the tax year.
Payment dates are unchanged. MTD ITSA does not change when tax is due. Payment on account dates remain 31 January and 31 July, as under the current Self Assessment regime.
| Submission | Period Covered | Deadline | Calendar |
|---|---|---|---|
| Q1 Update | 6 Apr 2026 – 5 Jul 2026 | 7 August 2026 | |
| Q2 Update | 6 Jul 2026 – 5 Oct 2026 | 7 November 2026 | |
| Q3 Update | 6 Oct 2026 – 5 Jan 2027 | 7 February 2027 | |
| Q4 Update | 6 Jan 2027 – 5 Apr 2027 | 7 May 2027 | |
| EOPS | Full year 2026/27 | 31 January 2028 | |
| Final Declaration | Full year 2026/27 | 31 January 2028 |
| Submission | Period Covered | Deadline | Calendar |
|---|---|---|---|
| Q1 Update | 6 Apr 2027 – 5 Jul 2027 | 7 August 2027 | |
| Q2 Update | 6 Jul 2027 – 5 Oct 2027 | 7 November 2027 | |
| Q3 Update | 6 Oct 2027 – 5 Jan 2028 | 7 February 2028 | |
| Q4 Update | 6 Jan 2028 – 5 Apr 2028 | 7 May 2028 | |
| EOPS | Full year 2027/28 | 31 January 2029 | |
| Final Declaration | Full year 2027/28 | 31 January 2029 |
| Submission | Period Covered | Deadline | Calendar |
|---|---|---|---|
| Q1 Update | 6 Apr 2028 – 5 Jul 2028 | 7 August 2028 | |
| Q2 Update | 6 Jul 2028 – 5 Oct 2028 | 7 November 2028 | |
| Q3 Update | 6 Oct 2028 – 5 Jan 2029 | 7 February 2029 | |
| Q4 Update | 6 Jan 2029 – 5 Apr 2029 | 7 May 2029 | |
| EOPS | Full year 2028/29 | 31 January 2030 | |
| Final Declaration | Full year 2028/29 | 31 January 2030 |
Sources: HMRC MTD Campaign Site; GoCardless MTD Guide
Filing quarterly updates for clients? Aligned is MTD software for accountants that lets you upload any spreadsheet and submit to HMRC in minutes. Free during the soft landing period.
Try it freeDo you need Xero or QuickBooks for Making Tax Digital, or will bridging software do?
One of the most common questions from accountants and bookkeepers preparing for MTD is whether every in-scope client needs to move onto cloud bookkeeping software like Xero, QuickBooks, or FreeAgent. The short answer: no. HMRC requires MTD-compatible software to keep digital records and submit quarterly updates - but it does not mandate any specific type. MTD bridging software for accountants that connects existing spreadsheets to HMRC's API is a fully compliant route.
Toggle each question to see a recommendation for this client.
This is a general guide to help you think through software options for each client. It is not tax or professional advice. The right choice depends on each client's specific circumstances.
MTD ITSA bridging software vs Xero, QuickBooks, FreeAgent - what's included
| Feature | Bridging Software | Full Bookkeeping Software |
|---|---|---|
| Primary purpose | Submit to HMRC via MTD API | End-to-end bookkeeping + MTD |
| Quarterly HMRC submissions | Yes | Yes |
| Works with existing spreadsheets | Yes - no workflow change | No - requires data migration |
| Automatic data mapping | Some tools map spreadsheet data to HMRC fields automatically | No - use platform templates |
| Bank feed integration | No (use CSV exports) | Yes - automatic |
| Invoicing | No | Yes |
| Expense tracking | Via your own spreadsheet | Built in |
| VAT returns | No | Yes (most platforms) |
| Payroll | No | Some (e.g. FreeAgent) |
| Multi-client dashboard | Varies by tool | Yes (practice/agent plans) |
| Audit trail | Per submission | Full journal history |
| Client onboarding effort | Low - upload existing spreadsheet | High - data migration required |
| Typical cost per client/month | Free–£10 | £12–£36+ |
| Data ownership / lock-in | Data stays in your files | Data held in vendor's cloud |