Making Tax Digital for Income Tax Self Assessment — usually shortened to MTD for Income Tax, or MTD ITSA — is HMRC’s change to how self-employed people and landlords report their income. It replaces the once-a-year Self Assessment tax return with digital record-keeping and updates sent to HMRC during the year.
It does not change how much tax you pay, or when you pay it. It changes how you keep your records and how often you tell HMRC what they say.
The three things it asks of you
1. Keep your records digitally. Every item of business income and expenditure has to be recorded in software rather than on paper or in a shoebox. A spreadsheet can count, but only if it connects to submission software without you retyping figures.
2. Send HMRC a quarterly update. Four times a year you send HMRC a summary of your income and expenses for the year so far. These are estimates in the sense that they are unadjusted — no allowances, no reliefs, no accounting adjustments. HMRC does not send you a bill off the back of them.
3. Finish the year with a Final Declaration. After the tax year ends you confirm your figures, add anything that was not in the quarterly updates — employment income, bank interest, dividends, pension contributions, reliefs — and declare the whole thing is correct. This is the part that replaces your tax return.
What it replaces, and what it does not
| Before | Under MTD for Income Tax |
|---|---|
| One Self Assessment return a year | Four quarterly updates plus a Final Declaration |
| Records kept however you liked | Records kept digitally, in compatible software |
| Tax payable 31 January (and 31 July payments on account) | Unchanged — same dates, same amounts |
That last row is the one people most often get wrong. Quarterly updates are not quarterly tax bills. Your payment dates do not move.
When it starts for you
MTD for Income Tax is being phased in by income level, based on your qualifying income — your gross income from self-employment and property added together, before you take any expenses off.
- From 6 April 2026 if your qualifying income is over £50,000
- From 6 April 2027 if it is over £30,000
- From 6 April 2028 if it is over £20,000
These thresholds and dates are HMRC’s — check the current position on GOV.UK: who must use Making Tax Digital for Income Tax.
HMRC works this out from your tax return for the year two years earlier, so your 2025/26 return is what decides whether you are in from April 2027. If you are below the threshold you carry on with Self Assessment as normal, though you can join voluntarily.
There is more detail in our guide to who is mandated and when.
What this means in practice
The real change is the habit, not the paperwork. Under Self Assessment you could leave everything until January. Under MTD you need your records to be roughly current four times a year, because a quarterly update is due five weeks after each quarter ends.
That is a bigger adjustment than the filing itself. People who already reconcile their bank statements monthly barely notice it. People who do a shoebox reckoning every January find the first year uncomfortable.
Where TaxSwipe fits
TaxSwipe is designed to work with Making Tax Digital. You import your bank statements, sort each transaction into a category with a swipe, and it keeps the digital records MTD requires and works out the quarterly figures for you.
We are not on HMRC’s list of software for Making Tax Digital yet, and we will say so plainly here when that changes.
Keep me posted
Plain-English updates on Making Tax Digital, and a note when TaxSwipe gains new features. No more than a couple of emails a month.
We store your address to send you these updates and nothing else. We never sell it or pass it on. See our Privacy Policy for how we handle your data and how to ask us to delete it.