MTD ITSA Deadlines 2026 | UK Sole Traders & Landlords Guide

The requirement to comply with MTD ITSA from April 2026 applies to those with qualifying income over £50,000 in the 2024/25 tax year. A traditional Self Assessment return will still be required for the 2025/26 tax year, due by 31 January 2027.

Introduction to Making Tax Digital for Income Tax Self Assessment (MTD ITSA)

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) represents a fundamental shift in how sole traders and landlords report their income and expenses to HMRC. Designed to make tax administration more efficient, transparent, and accurate, MTD ITSA requires affected individuals to keep digital records and send quarterly updates of their income and expenses using MTD-compatible software. This move aims to reduce errors, provide a more real-time view of tax liabilities, and ultimately simplify the tax process for millions of self-employed individuals and property owners across the UK.

The phased rollout of MTD ITSA begins in April 2026, initially impacting those with a qualifying income exceeding £50,000. A further phase will commence in April 2027 for those with qualifying income over £30,000. Understanding these changes and, crucially, the associated deadlines is paramount for ensuring compliance and avoiding penalties. This comprehensive guide will navigate you through the specific deadlines for UK sole traders in 2026, clarify who needs to comply, and outline the steps necessary to transition smoothly to the new digital tax regime.

AccountsOS is committed to supporting businesses through this transition, offering MTD-compatible software that streamlines digital record keeping and quarterly submissions, helping you meet your obligations with ease and confidence.

Who is Affected by MTD ITSA Phase 1?

MTD ITSA will be introduced in phases, with the initial phase targeting specific groups of taxpayers. It is crucial to determine if you fall within the scope of MTD ITSA from its commencement in April 2026.

Income Thresholds and Commencement Dates

The primary criterion for mandatory compliance with MTD ITSA is the level of your qualifying income.

Qualifying income	Applies from
£50,000+	April 2026 (based on 2024/25 income)
£30,000+	April 2027 (based on 2025/26 income)
Under £30,000	Future dates to be confirmed

For the April 2026 rollout, MTD ITSA applies to:

Self-employed individuals (sole traders) whose qualifying income from one or more businesses is £50,000 or more in the 2024/25 tax year.
Landlords whose qualifying income from one or more UK or overseas property businesses is £50,000 or more in the 2024/25 tax year.

Defining 'Qualifying Income'

It is essential to understand what constitutes 'qualifying income' for the MTD ITSA threshold. Qualifying income includes:

Gross income from self-employment: This is the total turnover from your business activities before deducting any expenses. If you operate multiple sole trader businesses, the gross income from all these businesses is combined.
Gross income from property: This refers to the total rent received from all your UK and overseas property businesses before deducting expenses. Similar to self-employment, if you have multiple property businesses, their gross incomes are aggregated.

Importantly, qualifying income does not include income from employment, pensions, investments, or other non-business sources. The threshold is assessed based on your income from the tax year immediately preceding the MTD commencement year. Therefore, for the April 2026 start date, your 2024/25 tax year income is the determining factor. If your combined gross income from self-employment and property for 2024/25 exceeds £50,000, you will be mandated into MTD ITSA from April 2026.

What if my income fluctuates? HMRC will assess your income annually. If your qualifying income drops below the threshold in a subsequent year, you may be able to opt out of MTD ITSA, but you must remain compliant until officially notified or exempted. Conversely, if your income rises above the threshold, you will be mandated into MTD ITSA from the start of the next tax year.

Key Dates and Deadlines for the 2026/27 Tax Year

For sole traders and landlords mandated into MTD ITSA from April 2026, the 2026/27 tax year marks the first period of compliance. This involves a new rhythm of reporting, moving away from a single annual Self Assessment return to more frequent digital submissions.

The MTD ITSA Tax Year: 6 April to 5 April

The MTD ITSA tax year aligns with the standard UK tax year, running from 6 April to 5 April. All reporting periods and deadlines are structured around this framework.

Transitional Year: 2025/26

Before MTD ITSA officially commences for you in April 2026, you will still need to file a traditional Self Assessment tax return for the 2025/26 tax year.

2025/26 Tax Year: 6 April 2025 to 5 April 2026.
Deadline for 2025/26 Self Assessment: 31 January 2027 (for online submissions).

This means you will be managing two systems concurrently for a brief period: preparing for MTD ITSA for 2026/27 while completing your final traditional Self Assessment for 2025/26.

Quarterly Updates (QUs) for 2026/27

The cornerstone of MTD ITSA is the requirement to submit quarterly summaries of your business income and expenses. These updates provide HMRC with a more frequent snapshot of your financial activity. For the standard tax year ending 5 April, the quarterly periods and their respective deadlines are:

Quarterly Period	Submission Deadline
6 April - 5 July	5 August
6 July - 5 October	5 November
6 October - 5 January	5 February
6 January - 5 April	5 May

These deadlines are for submitting the quarterly summary of income and expenses. They are not payment deadlines. The purpose of these updates is to give you and HMRC a clearer, more current picture of your tax position throughout the year, helping to avoid large, unexpected tax bills at year-end.

End of Period Statement (EOPS) for 2026/27

After your final quarterly update for the tax year, you will need to submit an End of Period Statement (EOPS). The EOPS is where you make any accounting adjustments or claims for reliefs and allowances that were not included in your quarterly updates.

EOPS Deadline for 2026/27: 31 January 2028.

The EOPS effectively finalises the business income and expenditure figures for the tax year before your overall tax liability is calculated.

Final Declaration for 2026/27

The Final Declaration combines all sources of income, including those not covered by MTD ITSA (e.g., employment income, pensions, savings interest, dividends), and calculates your overall tax and National Insurance contributions for the year.

Final Declaration Deadline for 2026/27: 31 January 2028.
Payment Deadline for 2026/27 Tax: 31 January 2028 (with Payments on Account for 2027/28 also due).

This deadline is also the date by which any tax owed for the 2026/27 tax year must be paid.

Important Note: The deadlines for quarterly updates are fixed regardless of your business's accounting period. However, if your business uses an accounting period that does not align with the tax year (e.g., 31 December year-end), special 'period of account' adjustments will be required in your EOPS to align your business profits to the tax year. AccountsOS automatically handles these adjustments.

How to Prepare for MTD ITSA Compliance

The transition to MTD ITSA requires proactive preparation to ensure a smooth switch and avoid compliance issues. Here are the key steps sole traders and landlords should take.

1. Assess Your Income and MTD Status

The first step is to confirm if you are mandated into MTD ITSA from April 2026. Review your gross business and property income for the 2024/25 tax year (6 April 2024 to 5 April 2025). If your combined qualifying income exceeded £50,000, you are in scope.

Gather 2024/25 records: Ensure you have accurate figures for all your self-employment and property income.
Understand 'qualifying income': Remember it is gross income, not profit.

2. Adopt MTD-Compatible Software

A fundamental requirement of MTD ITSA is to keep digital records and submit updates using HMRC-recognised MTD software. Manual record keeping, such as spreadsheets or paper ledgers, will no longer be sufficient on its own.

Research and choose: Select software that suits your business needs and is listed as MTD-compatible by HMRC. AccountsOS is designed with MTD ITSA in mind, offering intuitive digital record keeping and automated quarterly updates.
Start early: Begin using your chosen software well before April 2026 to familiarise yourself with its features and integrate it into your daily operations. This will help iron out any issues before mandatory submissions begin.

3. Digitize Your Record Keeping

With MTD ITSA, all business income and expenses must be recorded digitally. This means moving away from paper receipts and manual ledgers to an electronic system.

Digital Invoices and Receipts: Implement a system for receiving and storing invoices and receipts digitally. Many MTD software solutions offer features for scanning or photographing receipts.
Bank Feeds: Link your business bank accounts to your MTD software for automatic transaction import. This significantly reduces manual data entry and improves accuracy.
Categorisation: Ensure you accurately categorise all income and expenses according to HMRC's requirements. Good software will assist with this.

4. Understand Quarterly Reporting

Familiarise yourself with the concept of quarterly updates, the deadlines, and what information needs to be submitted.

Regularity: Get into the habit of reviewing and updating your digital records regularly, ideally monthly or weekly, to make quarterly submissions quick and easy.
Standard vs. Non-Standard Accounting Periods: Understand how your accounting period impacts the quarterly reports and the need for period of account adjustments if your year-end does not align with 5 April.

5. Consider Professional Advice

If you find the transition challenging or have complex tax affairs, engaging with an accountant or tax adviser who is knowledgeable about MTD ITSA can be invaluable.

Agent Authorisation: If you use an agent, ensure they are authorised by HMRC to act on your behalf for MTD ITSA.
Training and Support: Many accountants offer training on MTD-compatible software and guidance on navigating the new requirements.

6. Register for MTD ITSA

Once you have MTD-compatible software ready, you will need to register for MTD ITSA with HMRC. This cannot be done until you are ready to start using the software.

When to register: Register only when you are confident you can start keeping digital records and submitting quarterly updates. Do not register too early, as it will trigger your MTD obligations.
HMRC Gateway: You will need your Government Gateway user ID and password to register.

What are Quarterly Updates (QUs)?

Quarterly Updates are the core of the MTD ITSA regime. They replace the annual summary of business income and expenses with more frequent, digital submissions.

Purpose of Quarterly Updates

The main purposes of quarterly updates are:

Real-time tax visibility: To provide HMRC and the taxpayer with a more current estimate of tax liability throughout the year.
Reduced errors: Frequent updates help to identify and correct errors sooner, rather than discovering them at year-end.
Improved cash flow management: By seeing an estimated tax bill developing, taxpayers can better budget for their payments.

Information Required in Quarterly Updates

Each quarterly update requires a summary of your business income and expenses for that specific three-month period. This includes:

Total income: The gross turnover received from your self-employment or property business.
Total expenditure: The total of your allowable business expenses, categorised as required by HMRC.

The figures submitted in quarterly updates are provisional. No complex accounting adjustments or capital allowances are typically made at this stage. These adjustments are reserved for the End of Period Statement.

Adjustments and Corrections

If you realise an error in a previously submitted quarterly update, you can usually make a correction in a subsequent quarterly update or as part of your End of Period Statement. MTD-compatible software facilitates these adjustments.

Example: Standard Tax Year (6 April - 5 April)

Let us consider a sole trader with a standard accounting period ending 5 April, mandated into MTD ITSA from April 2026.

Quarter	Period Covered	Submission Deadline	Action
1	6 April 2026 - 5 July 2026	5 August 2026	Submit summary of income and expenses for Q1
2	6 July 2026 - 5 October 2026	5 November 2026	Submit summary of income and expenses for Q2
3	6 October 2026 - 5 January 2027	5 February 2027	Submit summary of income and expenses for Q3
4	6 January 2027 - 5 April 2027	5 May 2027	Submit summary of income and expenses for Q4

Example: Non-Standard Accounting Period (31 December Year-End)

A sole trader with an accounting period ending 31 December will still adhere to the same quarterly reporting deadlines based on the tax year. However, their End of Period Statement will cover their 12-month accounting period, and adjustments will be made to align it with the tax year.

Quarter	Period Covered (Tax Year Quarters)	Submission Deadline	Action
1	6 April 2026 - 5 July 2026	5 August 2026	Submit Q1 summary
2	6 July 2026 - 5 October 2026	5 November 2026	Submit Q2 summary
3	6 October 2026 - 5 January 2027	5 February 2027	Submit Q3 summary
4	6 January 2027 - 5 April 2027	5 May 2027	Submit Q4 summary
EOPS	For accounting period ending 31 December 2026, then adjusted to 5 April 2027	31 January 2028	Submit EOPS and make period of account adjustments
Final Declaration	For 2026/27 tax year	31 January 2028	Submit Final Declaration and pay tax

Basis Period Reform and MTD ITSA: The Basis Period Reform, effective from 6 April 2024, changed how trading income is allocated to tax years, moving to a 'tax year basis'. This means profits are taxed in the tax year they arise, regardless of your business's accounting period end date. For MTD ITSA, this is crucial for the End of Period Statement, where any necessary apportionment of profits or losses to align with the tax year (6 April - 5 April) will be made. MTD-compatible software like AccountsOS is designed to manage these complex calculations automatically.

End of Period Statement (EOPS)

The End of Period Statement (EOPS) is a vital part of the MTD ITSA process, serving as the bridge between your provisional quarterly updates and your final tax calculation.

What is the EOPS?

The EOPS is an annual declaration that finalises the income and expenditure figures for each of your self-employment and/or property businesses for the tax year. Unlike the quarterly updates, which are summaries of raw data, the EOPS is where you apply accounting principles and tax adjustments.

Adjustments: This is where you claim capital allowances, make accruals and prepayments, account for private use adjustments, and other accounting adjustments.
Basis Period Reform Alignment: For businesses with non-standard accounting periods, the EOPS is also where the profits or losses of the business's accounting period are allocated to the correct tax year under the new Basis Period rules.

When is the EOPS Submitted?

The EOPS must be submitted by 31 January following the end of the tax year it relates to.

For the 2026/27 tax year: The EOPS must be submitted by 31 January 2028.

If you have multiple businesses or property interests, you will need to submit a separate EOPS for each individual business.

Final Declaration

The Final Declaration is the ultimate step in the MTD ITSA reporting cycle, consolidating all your income sources and calculating your overall tax liability.

What is the Final Declaration?

The Final Declaration replaces the traditional Self Assessment tax return. It brings together all your income streams for the tax year, including:

Profits from self-employment and property businesses (as finalised in the EOPS).
Employment income.
Pension income.
Interest, dividends, and other investment income.
Capital gains.

It is also where you apply any personal allowances, reliefs, and deductions that apply to your total income, leading to the final calculation of your Income Tax and National Insurance liability.

When is the Final Declaration Submitted and Tax Paid?

The Final Declaration must be submitted, and any outstanding tax paid, by 31 January following the end of the tax year.

For the 2026/27 tax year: The Final Declaration and payment of tax are due by 31 January 2028.
This deadline also typically includes the first Payment on Account for the subsequent tax year (2027/28).

The information from your EOPS will automatically feed into your Final Declaration through MTD-compatible software.

MTD ITSA Penalties and Sanctions

HMRC has introduced a new penalty system for MTD ITSA, designed to encourage timely and accurate submissions. It is crucial to understand these penalties to ensure compliance.

Late Submission Penalties: Points-Based System

For late quarterly updates, EOPS, and Final Declarations, HMRC will implement a points-based penalty system.

Points Accumulation: You will receive a point for each late submission. Once you reach a certain threshold of points, a financial penalty is issued.
Thresholds: For annual submissions (EOPS, Final Declaration), the threshold is 2 points. For quarterly submissions, the threshold is 4 points.
Financial Penalty: Once the threshold is reached, a £200 penalty is issued for each subsequent late submission.
Points Expiry: Points expire after a certain period of compliance. For quarterly submissions, points expire after 24 months of continuous compliance.

Relaxed Penalties for Quarterly Submissions in the First Year (2026/27)

HMRC recognises that the transition to MTD ITSA will be a significant change for many. To assist with this, there will be a relaxation of penalties for late quarterly updates in the first year of mandatory compliance.

During the 2026/27 tax year, no points or financial penalties will be issued for late quarterly updates. This provides a grace period for businesses to adapt to the new reporting rhythm.
However, this relaxation does not apply to the End of Period Statement or the Final Declaration. These must still be submitted on time to avoid penalties.

Late Payment Penalties and Interest

It is critical to note that there is NO relaxation for late payments of tax.

Interest: HMRC will charge interest on any unpaid tax from the due date (e.g., 31 January 2028 for the 2026/27 tax year) until the date of payment.
Late Payment Penalties: Separate penalties apply if tax remains unpaid after 15 days, 30 days, and then at 6-month and 12-month intervals. These can quickly accumulate, adding significantly to your tax bill.

Penalties for Inaccurate Records or Submissions

HMRC can also issue penalties for errors in your digital records or submissions, particularly if they lead to an underpayment of tax.

The penalty amount depends on the nature of the error (careless, deliberate, or concealed) and whether you disclosed it to HMRC. Penalties can range from 0% to 100% of the additional tax due.
Using MTD-compatible software that helps with accurate categorisation and reconciliation can significantly reduce the risk of such errors.
Late Quarterly Update: Points-based system, up to 4 points then £200 penalty for subsequent failures. Relaxed for first year (2026/27).
Late End of Period Statement (EOPS): Points-based system, potentially £200 for each failure after initial warnings.
Late Final Declaration: Points-based system, potentially £200 for each failure after initial warnings.
Late Payment of Tax: Interest charged from due date. Penalties apply after 15, 30 days, and 6 months.
Inaccurate Records/Submissions: Percentage of the undeclared tax, ranging from 0% to 100% depending on behaviour.

Proactive Compliance: The best way to avoid MTD ITSA penalties is to implement a robust digital record-keeping system, use MTD-compatible software, and adhere strictly to all submission and payment deadlines.

Exemptions from MTD ITSA

While MTD ITSA aims for broad coverage, certain individuals and businesses may be exempt from its requirements. Understanding these exemptions is important if you believe you might not need to comply.

Who May Be Exempt?

HMRC provides for several categories of exemption, primarily based on income levels or specific circumstances:

Income Below Threshold: As outlined, MTD ITSA applies to those with qualifying income above £50,000 from April 2026, and above £30,000 from April 2027. If your income consistently falls below these thresholds, you are not currently mandated to join MTD ITSA.
Digitally Excluded: Individuals who are genuinely unable to use digital tools to keep records or submit returns due to age, disability, remoteness of location (no internet access), or other legitimate reasons may be exempt. This is assessed on a case-by-case basis.
Religious Belief: Individuals whose religious beliefs are incompatible with the MTD requirements may also be granted an exemption.
Insolvency: Businesses that are in insolvency procedures might be temporarily or permanently exempt.
Non-UK Residents: Certain non-UK resident landlords with minimal UK property income may have simplified reporting requirements, potentially exempting them from full MTD ITSA.

How to Apply for an Exemption

If you believe you qualify for an exemption, you must contact HMRC directly to explain your circumstances and formally request an exemption.

Contact HMRC: The primary method is to call the HMRC Self Assessment helpline. Be prepared to provide detailed reasons and any supporting evidence for your exemption claim.
Official Confirmation: Do not assume you are exempt until you have received official confirmation from HMRC. Continue to maintain records and prepare for MTD ITSA until you are explicitly told otherwise.

Voluntary Compliance: Even if you are exempt, you can still choose to voluntarily comply with MTD ITSA. Many businesses find the benefits of digital record keeping and real-time tax insights valuable, regardless of mandatory requirements. AccountsOS supports both mandated and voluntary MTD ITSA users.

Benefits of MTD ITSA and Using AccountsOS

While the transition to MTD ITSA requires effort, it brings significant benefits for sole traders and landlords, particularly when leveraging MTD-compatible software like AccountsOS.

Improved Accuracy and Reduced Errors

Digital Records: Moving away from manual entry reduces the risk of human error, transcription mistakes, and lost receipts.
Automated Calculations: MTD software automates calculations, ensuring accuracy in your quarterly updates and final declarations.
Early Correction: Frequent reporting allows for errors to be identified and corrected much sooner, preventing them from compounding into larger issues at year-end.

Real-Time Financial Overview

Up-to-Date Insights: By keeping digital records and submitting quarterly, you gain a continuous, accurate view of your income, expenses, and estimated tax liability.
Better Business Decisions: With clearer financial data, you can make more informed decisions about pricing, spending, and investment throughout the year.
Cash Flow Management: Understanding your tax position earlier helps you set aside funds, preventing unexpected large tax bills and improving cash flow management.

Efficiency and Time Savings

Reduced Admin: Automated bank feeds and smart categorisation in AccountsOS drastically cut down on manual data entry.
Simplified Submissions: With records kept digitally throughout the year, quarterly updates become quick, routine tasks rather than arduous annual reconciliations.
Easier Year-End: The EOPS and Final Declaration are largely pre-populated from your ongoing digital records, making year-end tax compliance much faster and less stressful.

Enhanced Compliance and Reduced Stress

Meeting Obligations: MTD-compatible software ensures you meet HMRC's digital record-keeping and submission requirements, reducing the risk of penalties.
Peace of Mind: Knowing your tax affairs are in order and up-to-date provides significant peace of mind.
Support for Agents: If you use an accountant, MTD software facilitates seamless collaboration, making their job easier and potentially reducing your accounting fees.

How AccountsOS Helps with MTD ITSA Compliance

AccountsOS is built to make your MTD ITSA journey as smooth as possible.

Digital Record Keeping

Effortlessly capture and categorise all your income and expenses digitally. Link bank accounts for automatic transaction import and smart categorisation.

Automated Quarterly Updates

Generate and submit your quarterly summaries directly to HMRC with just a few clicks. AccountsOS ensures your data is MTD-compliant.

Deadline Reminders

Receive timely notifications for all MTD ITSA deadlines, including quarterly updates, EOPS, and Final Declarations, helping you avoid penalties.

EOPS & Final Declaration Ready

AccountsOS compiles all necessary data for your End of Period Statement and Final Declaration, simplifying the year-end process and ensuring accuracy.

Real-Time Tax Estimates

See your estimated tax liability update throughout the year, giving you clear visibility and helping you budget effectively.

Basis Period Reform Support

AccountsOS automatically handles the complex calculations required for the Basis Period Reform, aligning your business profits to the tax year.

Frequently asked questions

When does MTD ITSA officially start for sole traders and landlords?

MTD ITSA officially goes live in April 2026 for sole traders and landlords with a qualifying income of £50,000 or more in the 2024/25 tax year. A second phase for those with income over £30,000 will commence in April 2027.

What is 'qualifying income' for MTD ITSA?

Qualifying income refers to the gross income from your self-employment and/or property businesses. It is the total turnover before any expenses are deducted. Income from other sources, like employment or pensions, does not count towards this threshold.

Do I still need to file a traditional Self Assessment for 2025/26?

Yes, for the 2025/26 tax year, you will still need to submit a traditional Self Assessment tax return by 31 January 2027. MTD ITSA obligations begin with the 2026/27 tax year for those in scope.

What are the main deadlines I need to remember for the 2026/27 MTD ITSA year?

For the 2026/27 tax year, you will have four quarterly update deadlines (5 August 2026, 5 November 2026, 5 February 2027, 5 May 2027), an End of Period Statement due by 31 January 2028, and a Final Declaration and tax payment also due by 31 January 2028.

Are there penalties for missing MTD ITSA deadlines?

Yes, HMRC has a points-based penalty system for late submissions. However, for the 2026/27 tax year, penalties for late quarterly updates will be relaxed. Penalties for late EOPS, Final Declarations, and late tax payments will still apply.

Do I have to use MTD-compatible software?

Yes, a core requirement of MTD ITSA is that you must keep digital records and submit all your updates and declarations using MTD-compatible software that is recognised by HMRC. Manual record keeping alone is not sufficient.

What if my business accounting period does not end on 5 April?

You will still submit quarterly updates based on the standard tax year quarters. However, in your End of Period Statement, AccountsOS will help you make 'period of account' adjustments to align your business profits to the tax year, as per the Basis Period Reform.

Can I be exempt from MTD ITSA?

Exemptions are available for those whose income falls below the threshold, or for those who are 'digitally excluded' due to legitimate reasons such as age, disability, or lack of internet access. You must apply to HMRC for an exemption and receive official confirmation.