Questions

What is Making Tax Digital for Income Tax (MTD ITSA)?

MTD, MTD ITSA, MTD IT: one thing, several names

HMRC calls it Making Tax Digital for Income Tax. Accountants and software makers shorten it to MTD for Income Tax, MTD ITSA (Income Tax Self Assessment) or MTD IT. It sits inside Self Assessment: you keep your Unique Taxpayer Reference (UTR) and still send a tax return for the year. What changes is how the figures get to HMRC.

It is separate from MTD for VAT, which VAT registered businesses already use. A VAT registered sole trader may need both.

Who has to use it, and from when

HMRC looks at your qualifying income: your self-employment and property income before expenses, from the tax return of an earlier year (GOV.UK).

Partnerships will join later; HMRC has not set a date. HMRC writes to people who are over a threshold, but it says checking is still your own job.

What you do under MTD

HMRC's guide lists the jobs (GOV.UK):

1. Use compatible software. HMRC does not provide any.
2. Keep digital records of your self-employment and property income and expenses: amount, date and category.
3. Send a quarterly update every three months. It is a summary of totals, not a tax return.
4. Add any other income, such as dividends or a pension.
5. Send your tax return through the software by 31 January after the tax year.

The quarterly deadlines are 7 August, 7 November, 7 February and 7 May. New penalty points apply to late updates and returns.

Where Octobooks fits

Octobooks keeps the books of UK sole traders and landlords and sorts every entry into the categories of the self-employment pages (SA103F) and the UK property pages (SA105). Its Making Tax Digital for Income Tax connection is built and runs end to end against HMRC's test service (the sandbox). Octobooks is not on HMRC's list of compatible software yet; we are working towards recognition. Until it is listed, send your updates and your return through a product that is on the list. All the dates in one place: the MTD for Income Tax guide.

More questions

• Do I need Making Tax Digital from April 2027?
• What are MTD quarterly updates, and when are they due?
• Which accounting software works for Making Tax Digital for Income Tax?

Sources

• GOV.UK: Find out if and when you need to use Making Tax Digital for Income Tax
• GOV.UK: Use Making Tax Digital for Income Tax
• GOV.UK: Making Tax Digital for Income Tax for sole traders and landlords, step by step

Updated 2026-10-29. General information, not tax advice for your own case.