For many UK sole traders and landlords, Self-Assessment tax returns have been an annual ritual—collecting receipts, scribbling notes, and racing to meet the 31 January deadline. From April 2026, HMRC will introduce Making Tax Digital for Income Tax Self-Assessment (MTD ITSA). This marks a fundamental shift in how individuals report income and expenses, moving from a once-a-year paper routine to real-time digital updates.


Why MTD ITSA is a Game-Changer

  • Quarterly reporting, not annual only — Submit income and expenses every three months, not just once a year
  • Digital record keeping — Keep all income and expense records in an HMRC-recognised software—not paper or spreadsheets
  • Final declaration at year end — Send one final declaration to confirm totals, replacing the full SA100 return


Who Will Be Required to Use It

HMRC plans a phased introduction based on income levels:

  • From April 2026: Self-employed individuals and landlords with qualifying income over £50,000
  • From April 2027: Threshold lowers to £30,000
  • From April 2028: Further extended to those earning £20,000

By the end of 2028, nearly all individuals earning beyond £20,000 from business or property will need to follow MTD ITSA.


What You’ll Need to Do Differently

  • Keep digital records of all income and expenses using approved software
  • Make Quarterly Updates: submit summaries of income and costs to HMRC every three months
  • At year-end, file a Final Declaration summarising everything and confirming tax due


Benefits of Transitioning to MTD ITSA

  • More accurate tax management — By updating regularly, errors are spotted early, not at year-end
  • No end-of-year panic — Spread reporting across four updates, reducing workload crunch
  • Budgeting peace of mind — Real-time updates give a clearer picture of what tax you owe
  • Better record keeping — Digital tools simplify documentation and make audits easier


What Could Be Challenging?

  • New penalty system — HMRC will use a points-based system with higher penalties than before
  • Digital readiness required — Must use approved software; paper records no longer accepted
  • Learning curve — Quarterly deadlines require planning and routine attention


How to Get Ready Before April 2026?

  • Check your qualifying income see if and when you'll need to join
  • Choose MTD-compatible software early test features before it becomes compulsory
  • Start keeping digital records now to avoid a steep change next year
  • Set up reminders for quarterly deadlines and your final declaration
  • Consider advisory support if your income sources are complex


How Nomi Helps You Transition to MTD ITSA?

Nomi is an all-in-one cloud accounting software built for UK accountants and small businesses. It supports MTD for Income Tax with a range of helpful features:

  • Digital record keeping — Store all income and expense records securely and digitally
  • Quarterly updates built-in — Send MTD-compliant summaries directly to HMRC
  • Final Declaration support — One-click year-end submission with adjustments for allowances
  • Live dashboards — Keep track of tax estimates, deadlines, and workload at a glance
  • Shared client portal — Clients can share receipts seamlessly, improving accuracy
  • Mobile and cloud-based — Update your records anywhere, anytime
  • Penalty alerts — Nomi reminds you of deadline approaches, helping avoid fines


Summary: MTD ITSA at a Glance

  • Firms and landlords earning over £50,000 will join MTD from April 2026 thresholds will lower in subsequent years
  • Quarterly updates and digital record-keeping are required; SA100 returns are replaced by final declarations
  • Benefits include accuracy, smoother tax workload, and digital efficiency, but you'll need to adapt to new routines and penalties
  • Using a tool like Nomi ensures a smoother transition, supports compliance, and cuts admin stress


Conclusion

The introduction of MTD for Income Tax Self-Assessment in 2026 marks a big change from annual paper returns to real-time digital reporting. While it may seem daunting, it brings long-term benefits: greater accuracy, less year-end stress, and better financial insight.

With Nomi’s MTD-ready software, UK taxpayers can embrace this shift with ease keeping up-to-date records, staying compliant, and filing confidently in the digital age.