What Making Tax Digital means for the self-employed
Making Tax Digital for Income Tax, sometimes written as MTD ITSA, is an HMRC programme that moves income tax reporting away from a single yearly return and towards digital record keeping with regular updates through the year. It applies to self-employed sole traders and to landlords, and for anyone running their own trade it changes how you record income, how often you report to HMRC, and the software you are allowed to use.
Today a self-employed person keeps records in whatever way suits them, then files one Self Assessment return once the tax year has ended. Under Making Tax Digital, three obligations replace that single annual job. You must keep your business records digitally, you must send HMRC a summary of income and expenses every quarter using compatible software, and you must submit a final declaration that confirms your figures for the year. The final declaration takes the place of the Self Assessment return you file now.
For a self-employed worker the practical result is that reporting turns into a routine you maintain through the year, instead of a January scramble to piece together twelve months of invoices and receipts.
Which self-employed people are affected, and when
Making Tax Digital for self-employed workers is being phased in by qualifying income, which means your total gross income from self-employment and property before expenses are taken off. This is the figure that trips people up, because it is turnover, not the profit you actually live on. The first group joins from 6 April 2026.
- From April 2026 Qualifying income above £50,000
Sole traders and landlords above this level must follow Making Tax Digital for Income Tax.
- From April 2027 Qualifying income above £30,000
The threshold falls to this level.
- From April 2028 Qualifying income of £20,000 or more
The government has confirmed plans to bring in those at this level.
HMRC looks at the income on your most recent finalised Self Assessment return to decide when you start. If your 2024 to 2025 return shows combined self-employment and property income above £50,000, you are in the first wave and April 2026 is the date to be ready by. Check that figure now rather than later, because a self-employed person can bill well over £50,000 in a year while taking home much less after materials, travel and other costs. The threshold does not care about your margin.
Some people can apply for an exemption, including those who genuinely cannot use digital tools, and a few groups are outside the April 2026 start entirely. General partnerships have their own timetable and are not brought in on this date. If you are close to a threshold, treat the earlier date as your planning target rather than hoping your turnover stays below it.
How the quarterly routine works for a sole trader
The defining change for self-employed reporting is frequency. In place of one return, you send four quarterly updates and then a final declaration. Each quarterly update is a running total of your business income and expenses for the period, submitted through MTD-compatible software rather than typed into the HMRC website by hand.
The standard quarters run to 5 July, 5 October, 5 January and 5 April, and each update is due one month and seven days after the period ends. You can choose calendar-quarter dates instead if they suit your bookkeeping better. These updates are cumulative and are not a demand for tax; they are a regular snapshot of how the year is going. You settle the full position in the final declaration, which is due by 31 January after the tax year, the same deadline Self Assessment uses today.
Two details catch self-employed people out. First, digital record keeping is not the same as tidying a spreadsheet at year end: the link between your records and your submission must be digital, so retyping figures from one system into another is not allowed. Second, four updates a year means four moments when your numbers need to be accurate, which is why a steady bookkeeping habit becomes far more useful than a drawer full of receipts sorted every January.
What counts as digital records
Many self-employed people hear digital record keeping and picture an intimidating accounting system. In practice it means recording each item of business income and expense in software as it happens, rather than collecting paperwork once a year. You still keep the underlying evidence, such as invoices and receipts, but the figures that feed your quarterly updates sit in one digital place from the outset.
HMRC requires the data to flow from your records to your submission digitally, which is often called a digital link. Put simply, you should not need to read a number off one screen and type it into another. Sound software captures each transaction once and carries it through to the quarterly update and the final declaration without manual copying, which is the point where errors normally appear.
For most sole traders this adds up to less work, not more. Logging a handful of transactions each week is lighter than rebuilding a year from a carrier bag of receipts every January, and it means your quarterly figures are ready when the deadline comes round. A tidy, continuous record also makes it easier to see how the business is really doing, rather than finding out once a year.
How Quarterly Filer helps self-employed people with MTD
Quarterly Filer is built for exactly this change. It is built to HMRC's Making Tax Digital specification and connects through HMRC's official Making Tax Digital service, designed around the way a self-employed person actually works, so you can meet the new requirements without hiring an accountant to run the software for you. The aim is simple: keep your records in one place, and let the tool handle the quarterly submissions to HMRC.
A secure connection to HMRC
Quarterly Filer connects through HMRC's official Making Tax Digital service, so your quarterly updates and final declaration reach HMRC directly from the tool.
Import your figures from CSV
If you already track income and costs in a spreadsheet or export them from your bank, you can bring those figures in rather than retyping every line.
Quarterly updates on time
Quarterly Filer prepares each of your four updates and files them digitally to HMRC, with clear deadlines so nothing is left to the last minute.
Deadline reminders that keep you ahead
The software tracks your quarterly periods and prompts you before each deadline, which removes the risk of a missed submission and a penalty.
A record of what you have sent
Your submission history is kept in one place, so you always know which updates have gone to HMRC and when.
Because Making Tax Digital rewards a steady routine over a yearly panic, the right software gives you more than compliance. It gives you back the time you would have spent reconstructing the year, and the reassurance of knowing where your numbers stand at any point. Quarterly Filer is designed to make the quarterly rhythm feel light, so April 2026 arrives as a formality rather than a scramble.
How to prepare for Making Tax Digital before April 2026
Preparing is mostly a matter of starting early and building the habit before it becomes compulsory. A short checklist covers what matters.
- Check your qualifying income. Look at your most recent Self Assessment return and add your self-employment and property income before expenses. If the gross figure is above £50,000, April 2026 applies to you.
- Move your records digital now. The sooner you keep income and expenses in compatible software, the easier the switch. There is nothing to gain by waiting.
- Choose MTD-compatible software. You need a tool that can submit quarterly updates and the final declaration to HMRC. Quarterly Filer is built for self-employed people doing exactly this.
- Practise the quarterly rhythm. Start recording as you go and reconciling little and often, so the first real update in 2026 is routine rather than a new skill learned under pressure.
None of these steps is hard on its own. The advantage goes to the self-employed people who begin before the deadline forces them to, because they reach April 2026 already in the habit and treat the first quarterly update as a normal part of running the business.
Common questions about Making Tax Digital for the self-employed
Do I still file a Self Assessment return under MTD?
Not in its current form. Once you are in Making Tax Digital for Income Tax, your four quarterly updates and a final declaration replace the annual Self Assessment return. The final declaration is where you confirm your income, claim reliefs and allowances, and settle your tax position for the year.
What happens if I miss a quarterly deadline?
HMRC runs a points-based penalty system for late submissions. You receive a point for each missed deadline, and a financial penalty applies once you reach a threshold. Software that reminds you before each period ends, and files on your behalf, is the simplest way to keep points from building up.
Is my income measured on profit or turnover?
Qualifying income is measured on gross income before expenses, not profit. This is why some self-employed people are surprised to find they cross the £50,000 threshold even though their take-home earnings are lower. Check the gross figure, not what is left after costs.
Can I handle MTD myself without an accountant?
Yes. Making Tax Digital for the self-employed is designed to be manageable with the right software. Quarterly Filer handles the digital records and the submissions, so many sole traders will not need to pay for ongoing accountancy support simply to stay compliant. If your affairs are complex, an accountant is still worth having for advice, but the routine filing is well within reach on your own.