The MTD for Income Tax timeline
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is HMRC's plan to drag self-assessment into a quarterly digital cadence. The schedule has slipped twice (originally 2018, then 2024, then 2026). The current dates as of 2026:
- April 2026 — Mandatory for sole traders + landlords with combined gross income above £50,000
- April 2027 — Threshold drops to £30,000
- April 2028 — Threshold drops to £20,000
- TBC — Threshold drops further (HMRC has signalled but not committed)
If you're above £50,000 of self-employment + property income for 2025/26, you are inside the first cohort and have to file quarterly from April 2026.
What MTD ITSA actually requires
Four things change versus the old self-assessment process:
- Quarterly updates — Submit a summary of income and expenses every three months through MTD-compatible software. Not a full return, but a running summary.
- End-of-period statement — At the end of each accounting period, finalise the figures (treat it like the bookkeeping equivalent of closing the year).
- Final declaration — One annual final declaration that pulls everything together (replaces the self-assessment tax return).
- Digital records — All records must be kept digitally in approved software, not in spreadsheets that aren't bridge-compatible.
What 'MTD-compatible software' means
HMRC publishes a list of approved MTD ITSA software providers. Standard accounting software (Xero, QuickBooks, FreeAgent, Sage) is on the list. Bridging software (a connector that lets a spreadsheet submit to HMRC's API) is also on the list.
What's NOT on the list: paper records, free spreadsheets without bridging, or any tool that doesn't have an HMRC API integration.
What sole traders typically get wrong
From BookSnap conversations with sole traders crossing the £50,000 threshold:
- Underestimating the cadence — Quarterly + final declaration = 5 submissions per year, not 1. Plan the bookkeeping rhythm to match.
- Not separating income streams — A sole trader running a small lettings portfolio alongside their trade has to report each separately. Combined income drives the threshold; reporting structure stays separate.
- Treating bridging software as a permanent solution — Bridging from a spreadsheet works for the first year. By year 2 or 3, the cost and friction usually exceed the cost of moving to proper accounting software.
What BookSnap surfaces
BookSnap walks the sole trader / landlord through:
- Income forecast (combined trade + property)
- Threshold status (in / out of MTD ITSA for 2026/27)
- Software readiness (MTD-compatible? bridging?)
- Quarterly cadence planning
- Pair-with: ReceiptSnap for the receipt-capture half, FreelanceSnap for the IR35-driven contractor specifics
And produces a readiness summary so the sole trader and their accountant can have a focused conversation rather than an annual end-of-year scramble.
The boundary
BookSnap is decision support. The actual MTD submissions stay with the sole trader's MTD-compatible software (or their accountant). BookSnap surfaces the readiness picture; it does not file to HMRC.
Try it
Run BookSnap for a tax-readiness walk-through, or open the professional sector configurator route to see how BookSnap pairs with ReceiptSnap and FreelanceSnap for accountancy firm sites.