Who must register and deadlines
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is the biggest shake-up of the UK tax system in a generation. Rather than filing a single tax return at the end of the year, you must keep digital records and submit quarterly updates of your business transactions. This transition is being rolled out in distinct phases, and your specific start date is determined entirely by your total qualifying income.
Understanding the Timetable and Phases
The rollout has been divided into stages to give taxpayers and accountants time to adapt. HMRC uses historical tax returns (a "look-back" test) to decide when you must enter the scheme.
Do I need to register?
Enter gross income before expenses. Figures update as you type — commas and £ symbols are fine.
Total Qualifying Income
£0
You do not need to register for MTD yet.
Phase 1 — Over £50,000
Mandatory for all sole traders, self-employed individuals, and landlords with a combined gross qualifying income exceeding £50,000. Your entry is determined by the 2024/25 Self Assessment return. A penalty soft landing applies for the first year to late quarterly updates.
Phase 2 — Over £30,000
The entry threshold is reduced to £30,000, bringing a much larger population into the digital tax net. Your entry is determined by the 2025/26 Self Assessment return.
Phase 3 — Over £20,000
The threshold drops to £20,000, which has been formally legislated under recent tax reforms. Your entry is determined by the 2026/27 Self Assessment return.
Key Registration Rules
It is essential to realize that HMRC does not auto-enrol you. You or your appointed tax agent must complete the digital sign-up flow manually before your respective start date. Simply receiving a mandation letter from HMRC does not mean you are signed up.
- Qualifying Income: This refers to gross turnover or gross rental receipts before any expenses, capital allowances, or tax reliefs are deducted.
- Partnerships and Corporate Bodies: General partnerships, limited liability partnerships (LLPs), and limited companies are currently out of scope. However, individual partners who have separate sole trader or rental income exceeding the threshold must still register for those personal income streams.
- The Final Declaration: MTD does not replace the need to declare all other taxable income (such as PAYE, savings, or dividends). You must still complete a comprehensive year-end Final Declaration by 31 January following the end of the tax year.
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