Why this matters.
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is the biggest change to how sole traders and landlords report income to HMRC in decades. From April 2026, anyone with qualifying income above £50,000 must use HMRC-compatible software to keep digital records and submit quarterly updates to HMRC — replacing the annual Self Assessment tax return. From April 2027 the threshold drops to £30,000, and further expansion is planned.
Failing to comply carries financial penalties and late filing surcharges. Many accountants are already at capacity helping existing clients transition, so leaving preparation to the last minute may mean you cannot find professional support when you need it. The software compatibility requirement alone can take weeks to implement properly if you are currently using spreadsheets or paper records. Checking your position now and making the switch early is far less disruptive than scrambling to meet a mandatory deadline.