MTD ITSA Readiness Checker — Are You Ready for Making Tax Digital Income Tax?
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is mandatory from April 2026 for sole traders and landlords with income above £50,000. Answer five questions to get your readiness score and a personalised action plan.
What MTD ITSA actually requires — beyond the headlines
Most coverage of Making Tax Digital for Income Tax focuses on the mandate dates. The practical reality is more demanding. Under MTD ITSA, sole traders and landlords must keep digital records of every income and expense transaction using compatible software, submit a quarterly summary update to HMRC within one month of each quarter end (July, October, January, April), and submit a final declaration replacing the current annual Self Assessment return. HMRC will issue a tax calculation based on your quarterly submissions, and any adjustments are made at the final declaration stage.
Crucially, "digital records" under MTD ITSA means records maintained in software that connects directly to HMRC — a spreadsheet alone does not qualify, though it can be used with compliant bridging software. Every transaction must have a digital link between its source and the submission to HMRC, with no manual transcription of totals. This is the digital link rule.
The mandate timeline and who is affected
From 6 April 2026: sole traders and landlords with total qualifying income above £50,000 must use MTD ITSA. From 6 April 2027: the threshold drops to £30,000. The date for income below £30,000, and for partnerships, has not yet been announced. Qualifying income includes self-employment turnover and UK property income; PAYE employment income and other sources do not count towards the threshold. If your income fluctuates around the threshold, HMRC uses the previous tax year's income to determine whether you are mandated.
HMRC issued a soft-landing announcement for 2026, but relying on this is not advisable — the direction of travel is clear and software adoption takes time. The five questions below identify where your gaps are and what to fix first.
MTD ITSA readiness check
0/5 answered1.What is your total income from self-employment and/or property?
2.Are you currently registered for Self Assessment with HMRC?
3.How do you currently keep your financial records?
4.How comfortable are you with reporting income quarterly (every 3 months)?
5.Does your current software support MTD ITSA quarterly submissions?
How this calculator works
- Income threshold
- MTD ITSA applies based on total qualifying income from self-employment and property. The threshold is £50,000 from April 2026, and £30,000 from April 2027. Partnership income and PAYE income count separately.
- Quarterly submissions
- Under MTD ITSA, you must submit quarterly summary updates to HMRC (within one month of each quarter end) rather than a single annual return. A final declaration replaces the current Self Assessment return.
- Compatible software
- HMRC requires MTD ITSA submissions to be made using approved software that connects directly to HMRC APIs. Spreadsheets alone do not qualify (though they can be used with compatible bridging software). AccLedger is HMRC-approved for MTD ITSA.
- Score methodology
- Your score is based on five factors: income level (obligation risk), Self Assessment registration status, current record-keeping method, comfort with quarterly reporting, and software compatibility. Higher scores indicate greater readiness.
Frequently asked questions
Who is affected by MTD ITSA?›
MTD ITSA applies to UK sole traders, freelancers, and landlords whose combined income from self-employment and property exceeds the threshold. From April 2026: income above £50,000. From April 2027: income above £30,000. Partnerships and those below the threshold are not yet mandated (date TBC). Employees with only PAYE income are not affected.
What does MTD ITSA mean in practice?›
Under MTD ITSA, instead of filing one annual Self Assessment return, you will submit four quarterly summary updates each year (summarising your income and expenses), plus a final declaration (replacing the current SA return). All submissions must be made through HMRC-approved software. Paper records and annual-only reporting will no longer comply.
What happens if I miss the MTD ITSA deadline?›
Failure to comply with MTD ITSA from the mandatory date can result in HMRC penalties. HMRC has indicated a points-based penalty system for late quarterly submissions, similar to the existing VAT penalty regime. There may be a soft-landing period initially, but you should not rely on this — the cost of non-compliance increases over time.
Does MTD ITSA replace Self Assessment completely?›
Not entirely. The annual final declaration (which replaces the annual tax return) remains, but the quarterly update process means most of your information is already submitted to HMRC throughout the year. The final declaration reconciles the full year position. HMRC aims to send you a tax calculation rather than requiring you to calculate it yourself.
Is AccLedger approved for MTD ITSA?›
Yes. AccLedger has production MTD ITSA credentials from HMRC. The platform handles quarterly submissions, the final declaration, and all required digital links between your records and HMRC. This is AccLedger's competitive moat — most accounting software is still in sandbox/testing for MTD ITSA.
AccLedger is HMRC-approved for MTD ITSA
One of the few platforms with production MTD ITSA credentials. Quarterly submissions, final declarations, and digital record-keeping — all connected directly to HMRC.
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