MTD for Income Tax: What Changes on 6 April 2026 and What to Do Now

What Exactly Changes on 6 April 2026

Before April 2026, sole traders file a single Self Assessment tax return once a year, typically by 31 January. After April 2026, those above the threshold must instead submit four quarterly updates throughout the year, each covering a three-month period of income and expenses.

These quarterly updates are not final tax bills. They are summaries of your trading income and allowable expenses for each quarter. At the end of the tax year you still make an End of Period Statement (EOPS) and a Final Declaration (previously called crystallisation), which is where you finalise your tax position, claim reliefs, and confirm everything is correct.

Think of it as replacing one annual exam with four short pieces of coursework plus a final exam. The total workload is similar, but spread across the year.

The MTD ITSA Quarterly Deadline Calendar (2026-27)

The tax year runs 6 April to 5 April. The four quarterly submission deadlines for the 2026–27 tax year are:

• Quarter 1 (6 Apr – 5 Jul 2026): submit by 7 August 2026

• Quarter 2 (6 Jul – 5 Oct 2026): submit by 7 November 2026

• Quarter 3 (6 Oct – 5 Jan 2027): submit by 7 February 2027

• Quarter 4 (6 Jan – 5 Apr 2027): submit by 7 May 2027

The End of Period Statement and Final Declaration must be completed by 31 January 2028 (same deadline as the current self-assessment return for that tax year).

Missing quarterly deadlines generates penalty points. Once you accumulate 4 points, HMRC issues a £200 penalty. Points are not immediate (HMRC has committed to a soft-landing period in the first year), but the points system begins from day one.

Who Must Comply from April 2026

The April 2026 threshold is gross income of £50,000 or more from self-employment and/or UK property. "Gross" means before expenses: a sole trader with £55,000 in sales and £20,000 in costs still has gross income of £55,000 and must comply.

If you have both a business and rental income, these are combined for the threshold. A sole trader earning £35,000 from their business and £18,000 from a rental property has £53,000 gross income and must comply.

From April 2027, the threshold drops to £30,000. HMRC has confirmed the voluntary sign-up scheme remains open. You can join MTD ITSA before your mandatory date if you want to get used to the system.

What You Must Do Before 6 April 2026

First: check whether your gross income exceeds £50,000. HMRC will contact taxpayers it believes are in scope, but self-assessment is your responsibility. Do not wait for a letter.

Second: choose and sign up to MTD-compatible software. You cannot use HMRC's own website to make MTD ITSA submissions. You must use third-party software that connects directly to HMRC's API. FileThat, for example, supports quarterly submissions, EOPS, and Final Declaration.

Third: register for MTD ITSA through your MTD-compatible software or via the HMRC Government Gateway. You will need your UTR (Unique Taxpayer Reference) and National Insurance number. Registration can take a few days to process.

Fourth: start recording income and expenses digitally from 6 April 2026. Records must be kept in a way that can be submitted directly from your software, not typed into HMRC's website manually.

What Happens If You Miss the April 2026 Deadline

If you are in scope and do not comply, HMRC will move to a points-based penalty regime. Late or missing quarterly submissions each generate one penalty point. At 4 points, a £200 fine is triggered. The points reset after a compliance period once all penalties are paid and submissions are up to date.

HMRC has historically been lenient in the first year of new obligations, but there is no statutory soft-landing for MTD ITSA. Getting set up before April, not after, eliminates any risk entirely.

The April 2027 Wave: £30,000 Threshold

From 6 April 2027, MTD ITSA extends to sole traders and landlords with gross income between £30,000 and £50,000. This adds roughly 700,000 more taxpayers to the mandatory regime.

If you earn just under the £50,000 threshold now, it is still worth setting up MTD-compatible software now. Getting comfortable with the system voluntarily, before it becomes mandatory, reduces stress and means your records are already in the right shape.