Making Tax Digital (MTD) is Coming, Are You Ready?
Making Tax Digital for Income Tax Self Assessment is being phased in from April 2026. Here is what it means for landlords and self-employed individuals, including those based overseas.
Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) is one of the most significant changes to UK tax administration in a generation. From April 2026, it becomes mandatory for millions of self-employed individuals and landlords. Here is what you need to know.
What Is MTD for ITSA?
Making Tax Digital for ITSA requires qualifying taxpayers to:
- Maintain digital records of their income and expenses using HMRC-compatible software
- Submit quarterly updates to HMRC (four times per year, within one month of the end of each quarter)
- Submit an end-of-period statement (EOPS) summarising the full year's figures
- Submit a final declaration (replacing the traditional Self Assessment tax return)
This replaces the single annual Self Assessment return with a continuous digital reporting cycle.
Who Does It Apply To?
From 6 April 2026:
- Self-employed individuals with qualifying annual income above £50,000
- Landlords with qualifying annual income above £50,000
From 6 April 2027:
- Self-employed individuals and landlords with qualifying annual income above £30,000
From 6 April 2028:
- Self-employed individuals and landlords with qualifying annual income above £20,000
"Qualifying annual income" broadly means gross income from self-employment and UK property before expenses.
Does MTD Apply to Non-UK Residents?
Yes, if you have UK rental income above the threshold, MTD applies even if you live overseas.
Non-UK-resident landlords with qualifying UK rental income are within the scope of MTD for ITSA. This means overseas landlords must:
- Use HMRC-compatible software that can interface with HMRC's systems
- Submit quarterly updates on a UK schedule (quarterly periods end 5 April, 5 July, 5 October, 5 January)
- Maintain digital records in an HMRC-compatible format
This can be challenging for landlords who manage their UK property from overseas and have historically relied on their accountant to handle annual compliance in one batch. The shift to quarterly reporting requires more frequent engagement with digital records throughout the year.
What Software Is Available?
HMRC maintains a list of compatible software. Broadly, the major options include:
- Xero, popular with landlords and small businesses; full MTD for ITSA support
- QuickBooks, widely used; MTD-compatible version available
- FreeAgent, designed for small businesses and landlords; MTD integration
- Landlord-specific software, several property management platforms are developing MTD compatibility
Expat UK Tax can manage your digital records and quarterly submissions on your behalf, if you prefer not to interact with the software directly.
Quarterly Submission Deadlines
| Quarter | Period | Submission Deadline | |---|---|---| | Q1 | 6 April-5 July | 5 August | | Q2 | 6 July-5 October | 5 November | | Q3 | 6 October-5 January | 5 February | | Q4 | 6 January-5 April | 5 May |
Missing quarterly deadlines attracts penalties under a new points-based system. Accumulate four penalty points and a £200 fine is triggered.
What You Should Do Now
If you are within scope for MTD from April 2026, the time to prepare is now. Steps to take:
- Confirm your qualifying income for the most recent tax year to establish whether you are in scope
- Select compatible software and set it up with your income and expense categories
- Transition your records from spreadsheets or paper to digital format
- Brief your accountant on the new quarterly reporting cycle
- Consider appointing an agent to manage submissions on your behalf
Expat UK Tax is fully MTD-ready. We can manage quarterly submissions, maintain your digital records, and handle HMRC liaison throughout the year. Contact us to discuss an MTD-ready compliance package.
