11. June 2026

Making Tax Digital for Income Tax: What You Need to Do Before Your First Submission

If you’re still tallying up your numbers on paper, now is the time to rethink your approach — before your first Making Tax Digital for Income Tax (MTD ITSA) submission is due.

Who Needs to Comply, and By When

If your sole trader income (and/or property income) was over £50,000 before expenses in the 2024/25 tax year, you should be preparing to submit your first Making Tax Digital for Income Tax (MTD ITSA) quarterly update to HMRC in July. The deadline for the first submission in this tax year is 7 August 2026.

Below are five simple steps to make complying easier.

1. Check That You Need to Be Registered

Check whether you need to register for Making Tax Digital for Income Tax (MTD ITSA), and if you haven’t already, register with HMRC.

You should have received a letter from HMRC confirming that you need to start using MTD ITSA if you’re required to send quarterly updates this year. If you didn’t receive a letter and want to check whether you need to register this year, HMRC has a tool you can use:

Find out if and when you need to use Making Tax Digital for Income Tax

2. Check If You May Be Exempt

There are some exemptions to MTDIT. Below are the main ones - see HMRC’s guidance for the full list:

Find out if you can get an exemption from Making Tax Digital for Income Tax

Partnerships are currently excluded.

You are permanently excluded unless your circumstances change, if:

Your qualifying income is £20,000 or below
You do not have a National Insurance number before the start of the tax year
You are a trust or non-resident company

You are automatically excluded if you are not physically or mentally capable of providing the information to HMRC and have a power of attorney or legally appointed person in place to act on your behalf.

Automatic exemptions currently apply if you included information in your 2024/25 tax return because you are a minister of religion, a Lloyd’s member, or received or transferred the Blind Person’s Allowance.

You can apply to be excluded if it’s not reasonable for you to use suitable software to keep records and submit returns. This may be due to age, health, disability, membership of a religious society or order, or lack of internet access.

You cannot apply for exemption because:

You previously filed a paper return
You are unfamiliar with accounting software
You only have a small number of transactions
It will take you extra time and cost to comply

3. Register With HMRC for MTD

Registration for MTD ITSA is not automatic, so if you meet the requirements, you do still need to sign up at HMRC. You can do this from your HMRC online account:

Information you’ll need to sign up:

The date your business or property income started, if it was within the last two tax years
Confirmation of the tax year you’ll start using MTD ITSA (you can apply to start earlier than your required tax year)
If you’re a sole trader, you’ll also need your business trading name, business address, and the nature of the business

Some of this information may be auto-completed if HMRC already holds it — check it’s correct before proceeding.

4. Decide How You’re Going to Submit Information to HMRC

If you aren’t used to using software, or even a spreadsheet, this may feel like a big change. But adding up the numbers and sticking them in a Word document isn’t going to work here.

You’ll need to record each transaction digitally, including the amount, date, and category (income or expense, as a minimum). It sounds like a lot, but it’s easy to do once you have a system in place. Here are your main options:

Use accounting software

If you have a bank account for your business, the easiest approach is to connect it to accounting software, which can analyse your transactions and submit the quarterly update directly. There are free options available if you don’t want to pay.

Use your banking app

Starling, Tide, Monzo and Anna all have built-in tools to analyse your transactions and submit updates to HMRC.

Use a spreadsheet

If you’re not confident with tech, this may not be the best option for you. It’s a more manual process and requires bridging software to submit to HMRC. The easiest approach is to download your transactions from your bank account (most bank statements can be downloaded as a CSV file), add them to a compatible spreadsheet, analyse the transactions, and use bridging software to submit to HMRC.

5. Submit Your First Update

Your first update is due to HMRC by 7 August 2026 — but don’t leave it to the last minute. However if you do run into a problem, the good news is that there are no penalty points for late quarterly updates in the first tax year.

Need a Hand Getting Ready?

Getting set up for Making Tax Digital doesn’t have to be stressful. Whether you need help checking if you’re affected, registering with HMRC, or choosing the right software for your business, we can help.