What is MTD ITSA?
MTD ITSA stands for Making Tax Digital for Income Tax Self Assessment. It is a UK government programme that requires self-employed individuals and landlords to:
- Keep digital records of their income and expenses
- Submit quarterly updates to HMRC using MTD-compatible software
- Make a final declaration at the end of each tax year
MTD ITSA replaces the current annual Self Assessment tax return with a more frequent digital reporting model. The goal is to reduce errors, make tax more real-time, and modernise HMRC's systems.
Unlike MTD for VAT (which has been mandatory since 2019), MTD ITSA is the first extension of Making Tax Digital to income tax. It introduces a fundamentally different way of engaging with HMRC for millions of landlords and self-employed people.
Who does MTD ITSA affect?
MTD ITSA applies to self-employed individuals and landlords whose total gross income from self-employment and property combined exceeds the relevant threshold.
| Mandate date | Income threshold |
|---|---|
| April 2026 | Over £50,000 |
| April 2027 | Over £30,000 |
| April 2028 | Over £20,000 |
Source: HMRC — Check if you're eligible for MTD ITSA.
Partnerships are not included in the initial rollout. General partnerships were previously expected in April 2025, but HMRC has deferred a decision on the timeline.
What is a quarterly update?
A quarterly update is a digital submission to HMRC of your cumulative income and expenses for the tax year so far. This is an important distinction: each quarterly update contains running totals from 6 April to the end of that quarter — not just the figures for the quarter you're reporting.
There are four quarterly update deadlines per tax year:
- Quarter 1: 6 April – 5 July (deadline: 7 August)
- Quarter 2: 6 July – 5 October (deadline: 7 November)
- Quarter 3: 6 October – 5 January (deadline: 7 February)
- Quarter 4: 6 January – 5 April (deadline: 7 May)
Missing a quarterly update deadline may result in penalty points under HMRC's points-based penalty regime. Four penalty points in a year trigger a £200 fixed penalty.
After the four quarterly updates, you submit a final declaration (replacing the current Self Assessment return) to confirm your total income, claim reliefs, and settle any remaining tax due.
What MTD-compatible software do you need?
You must use software that is recognised by HMRC as MTD-compatible. This means the software connects directly to HMRC's MTD APIs and can submit quarterly updates on your behalf. You cannot submit quarterly updates via HMRC's website — the software is mandatory.
HMRC maintains a list of recognised MTD ITSA software providers. For landlords with UK property income, the software must be able to submit property business quarterly updates.
Tofflo is being built specifically for UK landlords with property income, with a simple mobile-first experience designed around the quarterly update workflow.
Tofflo — MTD ITSA software for landlords
Track income and expenses, photograph receipts, and submit quarterly updates to HMRC directly from your phone. iOS and Android. Launching ahead of April 2026.
Learn more about Tofflo →Frequently asked questions
Does MTD ITSA replace Self Assessment?
MTD ITSA replaces the annual Self Assessment tax return with quarterly digital updates submitted throughout the year, followed by a final declaration at the end of the tax year. It does not eliminate the need to engage with HMRC — it changes how and when you report.
Can I still use an accountant?
Yes. You can authorise an agent (accountant or tax adviser) to manage your MTD ITSA submissions on your behalf. MTD-compatible software must still be used to submit updates — agents cannot submit via HMRC's website.
What if I have both self-employment and property income?
Your combined gross income from both sources counts towards the threshold. If you have two income sources, you will need to submit separate quarterly updates for each business (one for self-employment, one for property income).
What records do I need to keep?
You must keep digital records of all income received and allowable expenses incurred. This includes rent received, management fees, maintenance costs, insurance, mortgage interest (subject to relief rules), and any other allowable deductions. Receipts should be retained to support your records.