MTD for Income Tax: what your practice needs to know before April 2026

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) represents the most significant change to UK tax reporting since Self Assessment itself. From April 2026, sole traders and landlords with qualifying income above £50,000 will be required to keep digital records and submit quarterly updates to HMRC through MTD-compatible software. The threshold drops to £30,000 from April 2027. For accounting practices, this isn't a distant concern — it's an operational shift that needs planning now.

The quarterly submission requirement is the headline change. Instead of a single annual Self Assessment return, affected clients will submit summary updates to HMRC four times a year, followed by a final declaration that replaces the traditional return. Each quarterly update covers a three-month period and must be filed by the deadline — typically one month after the quarter ends. For a practice managing 200 sole trader clients, that's potentially 800 additional filing touchpoints per year. The administrative overhead of tracking and chasing these submissions manually is, frankly, unworkable at scale.

The practical challenge for most practices isn't the software — it's the client communication. Many sole traders and landlords have spent decades filing once a year. Shifting them to quarterly digital record-keeping requires education, repeated reminders, and a reliable system for collecting records four times as often. Practices that already have automated reminder pipelines are significantly better positioned: the infrastructure for chasing clients on a schedule already exists, and extending it to quarterly MTD submissions is a configuration change rather than a process overhaul.

Prompt is built around exactly this kind of deadline complexity. Each client's filing obligations — whether annual Corporation Tax, quarterly VAT, or the new quarterly MTD for ITSA submissions — are tracked individually with deadlines calculated from their specific periods. As MTD for ITSA rolls out, practices using Prompt can configure reminder sequences for quarterly submissions alongside existing annual obligations, ensuring clients receive timely, filing-specific prompts for every deadline without the practice having to manage the calendar manually. The shift to quarterly reporting is significant, but with the right infrastructure it doesn't have to mean four times the admin.