Changes are coming for sole traders and landlords with annual income over £50,000. From April 2026 you will have a new way to report your income and expenses to HMRC. The same rules will apply if you have income over £30,000 from April 2027.
The new requirements are called Making Tax Digital for Income Tax Self Assessment or MTD for ITSA. This means you must digitally report your total annual income from self-employment and property using ‘compatible software’.
You, or your agent if you have one, must:
digitally create, store and correct records of your self-employment and property income and expenses
send quarterly updates to HMRC
submit your tax return and pay tax due by 31 January the following year.
Who needs to sign up
You must register for MTD for ITSA if all the following apply.
You have already registered for income tax self-assessment (SAT).
You receive income from self-employment, property, or both.
You have qualifying income of more than £50,000 (£30,000 from April 2027).
Qualifying income for MTD for ITSA
Your qualifying income is your total income from self-employment and property in a tax year. Your total income may come from more than one source of self-employment or property.
All other sources of income reported through your self-assessment tax return aren’t included. This excludes income from:
employment (PAYE)
partnerships or dividends (including those from your own company)
a state pension
private pensions.
How to sign up for MTD for ITSA
Work out your qualifying income. HMRC will assess your gross income (or turnover) before expenses. Initially HMRC will look at your 2024/25 SAT return and write to you if your income is over the relevant threshold. However, your last tax return may not include all your most up to date information. You need to check carefully yourself. There is now an online tool to help you work out what you must do and when.
Use compatible software. You must choose and use suitable software to make your MTD for ITSA submissions to HMRC.
Sign up for MTD for ITSA. You must tell HMRC about your self-employed and property income during the tax year you start using MTD for ITSA. You’ll need your business start date or the date you started receiving property income (within the last two tax years).
If you’re a sole trader, you’ll also need:
the business name you use on your invoices
your business address
the nature of your business or trade.
You may receive self-employment income from several sources or property businesses. If so, you must make sure they are all included.
You’ll need the same user ID and password you received when you registered for self-assessment tax. You may also have to provide further proof of your identity by:
using an app on your mobile phone to match your photo with the one on your passport or driving licence
answering questions about information already held about your identity such as your passport, driving licence, or latest P60.
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