Making Tax Digital Checklist: Get Ready for April 2026

Making Tax Digital (MTD) for Income Tax launched on 6 April 2026. If your qualifying income — gross self-employment plus any UK property income — exceeds £50,000, you are now required to use MTD-compatible software and submit quarterly updates to HMRC. If you have not yet prepared, your first quarterly submission is due on 7 August 2026, which means there is still time to get set up correctly.

This Making Tax Digital checklist covers every step in order.

Step 1: Confirm whether Making Tax Digital applies to you

MTD for Income Tax applies to you from April 2026 if your qualifying income exceeded £50,000 in any tax year from 2024–25 onwards.

Qualifying income is calculated as:

• Gross self-employment turnover (total income, not profit — before deducting expenses)
• Plus gross UK property rental income (if applicable)

PAYE salary, dividends, and savings interest do not count towards the qualifying income threshold.

If your combined self-employment and rental income exceeds £50,000, you are in scope. If you are not certain whether you are affected, the MTD eligibility checker takes two minutes and gives a clear answer. There is also a full guide on who needs to comply with Making Tax Digital.

Phase 2 (£30,000+ qualifying income) follows in April 2027, and Phase 3 (£20,000+) in April 2028.

Step 2: Locate your UTR and National Insurance number

You will need both to sign up for MTD ITSA through HMRC:

• UTR (Unique Taxpayer Reference): your 10-digit reference number, found on Self Assessment correspondence, P60s, or through your Government Gateway account
• National Insurance number: on your payslip, P60, or HMRC letters

If you have misplaced either, both are retrievable through your personal tax account at gov.uk.

Step 3: Choose your Making Tax Digital software

MTD requires HMRC-recognised software to submit quarterly updates. You have two main routes:

Option A — Full accounting software

Dedicated accounting tools handle digital records, bank feeds, quarterly submissions, and year-end declarations in one place. The main options for UK sole traders are:

• FreeAgent — purpose-built for freelancers and sole traders; Self Assessment filing included; free for NatWest, RBS, Ulster Bank, and Mettle business account holders
• Xero — strong integrations and mobile app; good for growing businesses
• QuickBooks — comprehensive feature set; dedicated sole trader plan
• Sage — free tier available for sole traders (Sage Sole Trader plan)

For a comparison across all options, the best MTD software for sole traders guide covers features, pricing, and who each suits best.

Option B — Spreadsheet and bridging software

If you prefer to keep records in Excel or Google Sheets, you can continue to do so. You will need separate bridging software to submit your quarterly updates to HMRC. Bridging tools create the required digital link between your spreadsheet and HMRC's systems.

Read more about using spreadsheets for Making Tax Digital — including the digital link rules and which bridging tools are available.

Step 4: Sign up for MTD ITSA through HMRC

Enrolment in MTD ITSA is not automatic — you must sign up through your Government Gateway account (the same account used for Self Assessment).

To sign up, you will need:

• Government Gateway user ID and password
• Your UTR and National Insurance number (Step 2)
• Your chosen compatible software already set up and connected

Once signed up, HMRC will migrate you out of the standard Self Assessment system. Quarterly updates replace the annual return for business income — though the Final Declaration (which covers all income sources) still happens at year end.

Step 5: Set up digital records

From the start of your first MTD quarter, all business income and expense records must be kept in a digital format. This means:

• Every income transaction recorded in your software or spreadsheet
• Every business expense logged digitally — category, amount, date, and description
• Bank statements and receipts retained (physically or digitally) for at least five years

If you are currently using paper records or a manual system, this is the transition that requires the most time. Use the weeks before your first submission to:

• Import or re-enter the current tax year's records into your new software
• Set up bank feeds so transactions import automatically from your business account
• Establish a routine for categorising expenses — weekly or as transactions come in

Step 6: Understand the quarterly update schedule

Under MTD, you submit four quarterly updates per tax year, plus an End of Period Statement and Final Declaration at year end.

The standard quarterly periods and deadlines are:

Quarter	Period	Submission deadline
Q1	6 April – 5 July	7 August
Q2	6 July – 5 October	7 November
Q3	6 October – 5 January	7 February
Q4	6 January – 5 April	7 May

HMRC also allows calendar-month quarterly periods (1 April – 30 June, etc.) as an alternative. Check with your software provider whether this is available and whether it suits your situation.

Quarterly updates are a summary of income and expenses — not a tax payment. Tax continues to be calculated and paid via the year-end Final Declaration process.

Step 7: Understand your year-end obligations under MTD

At the end of the tax year, two additional steps replace the old Self Assessment return for your business income:

1. End of Period Statement (EOPS): confirms your business figures for the year and allows you to make any adjustments. Due by 31 January following the end of the tax year.
2. Final Declaration: covers all income sources (employment, property, investments), allowances, and deductions. This is the equivalent of the old Self Assessment return and is also due by 31 January.

If you work with an accountant, confirm in advance who is responsible for each step and whether your software supports the full year-end process including Final Declaration.

Making Tax Digital preparation checklist

Use this summary to confirm you have covered every step:

• Confirmed qualifying income exceeds £50,000 — MTD applies from April 2026
• Located UTR and National Insurance number
• Chosen and set up HMRC-recognised MTD software
• Enrolled in MTD ITSA via Government Gateway
• Digital records in place for all income and expenses from 6 April 2026
• Bank feed connected (if using accounting software)
• Quarterly schedule noted — first submission due 7 August 2026
• Year-end obligations understood — EOPS and Final Declaration by 31 January 2027
• Accountant (if applicable) briefed on MTD workflow responsibilities

For a full walkthrough of your first submission, the guide on your first quarterly update explains exactly what you need to enter and how to submit to HMRC.