MTD ITSA quarterly updates — what to send HMRC and when (2026)

From 6 April 2026, the way HMRC collects tax from higher-turnover sole traders and landlords changes for the first time in a generation. The annual Self Assessment return doesn't disappear — it gets replaced by four quarterly updates plus a Final Declaration, all submitted through HMRC-recognised software rather than the gov.uk website.

This guide covers exactly who's in scope, what data you have to send each quarter, the four hard deadlines, the new points-based late-filing regime, and what to do if your income hovers around the £50,000 threshold.

Who's in, who's out, and when

HMRC is rolling MTD ITSA out in three threshold tranches:

The threshold is your gross qualifying income (turnover before expenses + property rents) — not your profit. It's measured against the tax year that ends ~12 months before the start date. For the April 2026 launch, HMRC looks at your 2024/25 Self Assessment figure.

• Self-employment + property over £50,000? You're in from 6 April 2026.
• Between £30,000 and £50,000? You're in from 6 April 2027.
• Between £20,000 and £30,000? You're in from 6 April 2028.
• Under £20,000? Not affected — keep filing annual Self Assessment as before.

Who's outside MTD ITSA entirely

• Income under £20,000 (after April 2028)
• Income from PAYE only — even if you also have a small side hustle under threshold
• Trustees and personal representatives
• Foreign businesses with no UK property
• Partnerships — separate MTD timetable, no fixed start date yet

What actually changes about filing

The mechanics are different, but the tax owed isn't. Here's what shifts:

• Filing tool. The gov.uk Self Assessment portal closes for in-scope taxpayers. You'll submit through HMRC-recognised commercial software.
• Frequency. Four updates per year per income source, not one annual return.
• Records. Income and expenses must be captured digitally — spreadsheets are still allowed if you use bridging software, but paper-only logs aren't.
• Categories. Each transaction has to be tagged with the right HMRC category (10 simple expense buckets: cost of goods, car/van costs, rent/rates, repairs, admin, advertising, etc.).
• Final Declaration replaces SA100. Done by 31 January following the tax year, includes income outside MTD (interest, dividends, capital gains).
• Penalties. New points-based regime instead of automatic £100 (see below).

The four quarterly deadlines

Quarters run from the start of the tax year (6 April), not the calendar year. Each update is due by the 7th of the second month after the quarter ends:

• Q1 (6 April – 5 July) → due 7 August
• Q2 (6 July – 5 October) → due 7 November
• Q3 (6 October – 5 January) → due 7 February
• Q4 (6 January – 5 April) → due 7 May

You can opt to align your quarters to calendar quarters (Jan–Mar, Apr–Jun, etc.) if you've made an election in your software — the same 7th-of-the-month deadlines still apply. Most accountants recommend the standard tax-year alignment unless you're already running calendar-quarter VAT.

What data you have to send each quarter

Each update is a snapshot of your income and expenses for the quarter. You don't need to calculate tax — that comes at year-end. For each business or property income source, the update includes:

• Total turnover/income for the quarter
• Total expenses, broken into the 10 HMRC categories (10 if using detailed reporting; 3 categories if turnover is under the VAT threshold and you elect simpler reporting)
• Cumulative year-to-date totals (your software calculates these)

The quarterly update is not a tax payment. No tax is owed at the quarterly stage. The Final Declaration calculates the total annual liability, which is paid by 31 January as before.

The Final Declaration

At the end of the tax year, the Final Declaration replaces what used to be the SA100 annual return. It:

• Confirms your full year of business and property figures (rolling up the four quarterly updates)
• Adds any income outside MTD scope: bank interest, dividends, employment income, capital gains, foreign income, pension income
• Applies adjustments — capital allowances, balancing payments, losses brought forward, the trading allowance if used
• Calculates the final tax liability for the year
• Triggers the balancing payment (and any payments on account) by 31 January following the tax year

Deadline: 31 January following the end of the tax year — same as the old Self Assessment annual return. So 2026/27 → Final Declaration due 31 January 2028.

Late updates: the new points-based regime

MTD ITSA introduces a points-based late filing penalty system, replacing the automatic £100 fine model.

1. Each missed quarterly update earns you 1 point.
2. Hit 4 points and you trigger a £200 fixed penalty.
3. Every further missed update after the penalty triggers another £200.
4. Points expire after a period of sustained on-time filing (so a clean compliance run eventually wipes the slate).

Late payment of the actual tax (still due 31 January under the Final Declaration) follows the existing surcharge structure: 5% at 30 days late, another 5% at 6 months, another 5% at 12 months — plus interest from 1 February.

What software you actually need

HMRC's recognised-software list grows monthly. The minimum requirements:

• Captures your business income and expenses digitally
• Categorises each transaction into the HMRC expense buckets
• Maintains the digital record-keeping trail (no manual re-entry between systems)
• Submits the four quarterly updates and the Final Declaration via HMRC's MTD ITSA API

Bridging software (which lets you keep using a spreadsheet but adds the API submission layer) is allowed. End-to-end software (which captures bank feeds, categorises, and submits) is the lighter-touch option. Either is acceptable to HMRC.

Your MTD-readiness checklist

1. Check your 2024/25 Self Assessment — gross self-employment + property income over £50,000? You're in from April 2026.
2. Open a separate business bank account (not legally required, but makes categorisation 10× easier).
3. Choose HMRC-recognised software before April 2026. Test the bank feed and at least one quarter of categorised data before your first real submission.
4. Set the four hard deadlines as recurring calendar events: 7 August, 7 November, 7 February, 7 May.
5. Set the Final Declaration deadline: 31 January 2028 for your first MTD year.
6. If you use an accountant, agree the workflow now — who categorises, who submits, who reviews each quarter.
7. If your income hovers around £50,000, decide whether to elect into MTD voluntarily a year early to learn the rhythm before it's compulsory.