If your qualifying income is above £50,000, or close to that level, the period between now and 6 April 2026 is the time to prepare for Making Tax Digital for Income Tax Self Assessment (MTD for ITSA).
The following steps are a useful checklist.
1) Work out whether you are in scope
Use your latest self-assessment figures to:
- total your gross self-employment income
- total your gross rental income (UK and foreign)
- add the two figures together
If this combined figure for 2024/25 is above £50,000, you are in the April 2026 group. If it is between £30,000 and £50,000, you are likely to join in April 2027, and if it is between £20,000 and £30,000, you are expected to join in April 2028.
HMRC provides an online tool to check if and when you must use MTD for ITSA.
2) Review your record-keeping
If you still keep paper records or basic spreadsheets, you should consider moving to digital bookkeeping software that:
- can capture income and expenses in real time
- is recognised by HMRC as MTD-compatible
- can handle more than one business if you trade and let property.
If you already use software, check with the provider that it will support MTD for ITSA and how the quarterly update process will look in practice.
3) Decide how you want to structure your quarters
HMRC allows you to choose between standard update periods aligned with the tax year and calendar quarters, as long as you meet the same deadlines.
- Standard: 6 April–5 July, 6 July–5 October, 6 October–5 January, 6 January–5 April
- Calendar: 1 April–30 June, 1 July–30 September, 1 October–31 December, 1 January–31 March
Speak to whoever supports your bookkeeping about which option fits your accounting year and internal processes.
4) Clean up existing data
Use the remainder of 2025/26 to:
- reconcile bank accounts, debtor and creditor balances
- check that property income and expenses are complete and correctly categorised
- clear out duplicate or obsolete entries in spreadsheets or old systems.
Starting MTD with tidy opening data will make quarterly updates simpler and reduce the risk of avoidable errors.
5) Plan for cashflow and tax payments
Quarterly updates will give you more regular estimates of your tax bill, based on up-to-date records. HMRC expects this to reduce errors and the overall tax gap. Use these estimates to:
- set aside tax more regularly
- adjust payments on account where appropriate
- identify profitable or loss-making activities earlier in the year.
Autumn Budget 2025 also confirmed an extended freeze on income tax thresholds, which will bring more taxpayers into higher bands over time, so keeping a close eye on estimated liabilities is sensible.
6) If you’re ready, consider early sign-up
You can choose to sign up early to MTD for ITSA and join the pilot before you are mandated. Early sign-up may help you:
- get used to the software and new processes with more support
- identify any issues before quarterly updates become mandatory
- test how quickly you can produce reliable data after each quarter end.
Take into account that, so far, only a small proportion of those expected to join in 2026 have taken part in the pilot, so software offerings and support are still very much evolving.
Meet Alex Buckley – our MTD contact here at Lambert Chapman LLP:
“Making Tax Digital is all about working smarter, not harder. Using the right software means your records stay organised, your returns are quicker to prepare, and you have a clearer view of your finances all year round.
Good record-keeping doesn’t just help with compliance – it also enables you to make better business decisions.
The Lambert Chapman team can help you choose and set up the best system for your needs, train your staff, and provide continued support so you can make the most of digital tools with confidence.”
Get MTD-Ready
MTD for ITSA is no longer a distant policy idea. The start date, thresholds and core rules are set, and Autumn Budget 2025 has confirmed that April 2026 will go ahead, with some easing of penalties rather than a further delay.
For sole traders and landlords with qualifying income above £50,000, the rest of the 2025/26 tax year is the time to act. Checking whether you are in scope, choosing MTD compatible software, tidying your records and planning for quarterly updates now will make the move to MTD far less stressful. If you are unsure about how these rules apply to your situation, seek tailored advice before April 2026 so you can enter the new system on the front foot.
Have any MTD questions? We are only a click, a call or an email away.
Want to find out more about Making Tax Digital? You can get in touch with Alex, or we have also produced a free, quick-reference guide which you can download here >>
Making Tax Digital for Income Tax Self Assessment – the essential guide
Disclaimer
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.