Are you a landlord or sole trader in the UK earning more than £30,000? If so, a major change is coming your way — and it starts with your taxes. The UK government is rolling out Making Tax Digital for Income Tax Self Assessment (MTD for ITSA), a new digital system that will replace traditional tax returns with a smarter, more accurate way to report income.
From April 2026, landlords and self-employed individuals with income over £50,000 will be required to keep digital records and send quarterly tax updates to HMRC using approved software. A year later, in April 2027, those earning over £30,000 will join them. This move is part of HMRC’s push to simplify tax, reduce mistakes, and save time for busy individuals like you.
In this easy-to-understand guide by Brayan & Spencer Associates, we explain exactly what MTD means, who it affects, when it starts, and how you can prepare. Whether you’re managing rental income or running a small business, we’ll show you how to stay compliant — and even benefit — from going digital.
What is Making Tax Digital for ITSA?
Making Tax Digital is a government initiative to modernise the UK tax system. It means replacing paper-based or spreadsheet methods with digital tools. The goal is to make taxes easier, more accurate, and less time-consuming for everyone.
MTD for Income Tax Self Assessment (MTD for ITSA) specifically affects:
- Sole traders (self-employed individuals)
- Landlords with income from rental properties
Instead of filing one Self Assessment tax return each year, you will:
- Keep digital records of income and expenses
- Send quarterly updates to HMRC
- Submit a final declaration at the end of the tax year
Who Must Follow MTD for ITSA and When?
HMRC is introducing this in two phases:
| Start Date | Who Is Affected |
|---|---|
| April 2026 | Income over £50,000 (business/rent) |
| April 2027 | Income between £30,000–£50,000 |
If your total business or property income is under £30,000, you’re not required to follow MTD for now. However, you can join voluntarily, which can help you stay ahead and improve your financial organisation.
Why Is This Change Happening?
Every year, billions of pounds in taxes go unpaid due to avoidable mistakes. These often happen when people:
- Lose paper receipts
- Miscalculate expenses
- Miss deadlines
HMRC wants to close the tax gap and help individuals get their taxes right the first time.
Benefits of Making Tax Digital include:
- Reduced errors
- Easier submissions
- Less paperwork
- More time to focus on your business or property management
What Landlords Need to Know
If you earn rental income, even from just one property, MTD for ITSA may apply to you. You’ll need to:
- Keep digital records of all rental income and allowable expenses (e.g., repairs, insurance, agent fees)
- Send quarterly updates to HMRC via MTD software
- Submit a final declaration at the end of the tax year
Even if you use an accountant, you are responsible for ensuring your records are accurate and submitted digitally.
Tip: Start using MTD-compatible software now to get comfortable before it becomes mandatory.
What Sole Traders Need to Know
If you’re self-employed and earn over £30,000 annually, MTD for ITSA will soon apply to you. You’ll need to:
- Record income and expenses digitally (sales, purchases, travel, etc.)
- File updates every quarter summarising your finances
- Submit an end-of-year declaration confirming the final figures
At Brayan & Spencer Associates, we help sole traders choose the right digital tools and manage their submissions so they can focus on growing their business.
What Are Quarterly Updates?
Quarterly updates are short reports you send to HMRC four times a year. Each update includes a summary of income and expenses.
You don’t pay tax with these updates — it’s just so HMRC can track your progress throughout the year. Your tax bill is only calculated when you submit the final declaration.
Quarterly Deadlines (Expected):
- Q1: April to June → Due 5 August
- Q2: July to September → Due 5 November
- Q3: October to December → Due 5 February
- Q4: January to March → Due 5 May
Digital Record Keeping: What You’ll Need
Under MTD, you must use HMRC-approved software to keep your records. This software should:
- Track your income and expenses
- Allow digital attachments (like scanned receipts)
- Help submit quarterly reports
- Generate your final declaration
Examples of popular MTD-compatible software:
- QuickBooks
- Xero
- FreeAgent
- Sage
- HMRC’s free software (for simple cases)
If you already use spreadsheets, you can still use them — but only with bridging software that connects to HMRC.
What If You Can’t Go Digital?
HMRC understands that not everyone has access to the internet or digital skills. You may be eligible for an MTD exemption if:
- You have a disability
- You live in a remote area with no internet
- You’re over a certain age or face other limitations
To apply for an exemption, you can contact HMRC by phone or post. At Brayan & Spencer Associates, we help clients submit exemption requests where needed.
Costs Involved: What to Expect
Switching to digital tax may involve some costs, such as:
- Software subscription (often £5–£30/month)
- Training time to learn the system
- Professional advice from your accountant (optional)
However, most costs are tax deductible, and many software providers offer free plans for simple businesses.
| Income Bracket | Avg. One-Time Cost | Avg. Yearly Cost |
|---|---|---|
| Over £50,000 | £285 | £115 |
| £30,000–£50,000 | £350 | £110 |
Benefits of Going Digital
Many small business owners and landlords find digital systems easier once they get started. Some benefits include:
✅ No more searching for receipts
✅ Better cash flow tracking
✅ Faster year-end filing
✅ Fewer penalties due to late submissions
✅ Easier collaboration with your accountant
MTD can also be a great push to modernise your financial habits.
How to Get Ready – Your MTD Checklist
Here’s how to prepare for Making Tax Digital today:
✅ Check your income — will you be affected in 2026 or 2027?
✅ Choose MTD software — ask us for recommendations
✅ Start digital record keeping now to build habits early
✅ Talk to your accountant or book a consultation
✅ Stay updated with HMRC changes and deadlines
Brayan & Spencer Associates Can Help You Every Step of the Way
At Brayan & Spencer Associates, we specialise in helping landlords and sole traders get MTD-ready without stress. Our services include:
- Software setup & training
- Digital bookkeeping
- Quarterly MTD submissions
- Year-end declarations
- MTD exemption support
Whether you’re a busy landlord or an ambitious sole trader, our friendly team is here to guide you with expert advice and personalised service.
✅ Ready to Go Digital? Let Brayan & Spencer Associates Make It Simple
Navigating tax changes alone can feel overwhelming — but with the right support, it becomes effortless. Whether you’re a landlord juggling rental income or a sole trader managing business expenses, Making Tax Digital doesn’t have to be stressful.
At Brayan & Spencer Associates, we’re here to handle the hard part for you — from choosing the right software to filing every quarterly update accurately and on time.
📅 Book your free MTD consultation today
📞 Call us at 0207 183 5956
Take the first step towards stress-free tax management. Let’s go digital — together.
