When do I have to join MTD for Income Tax (ITSA)?

From 6 April 2026 if your gross income from self-employment and/or property exceeds £50,000; from 6 April 2027 if above £30,000. The government plans to legislate a £20,000 threshold (which would mean mandation from April 2028).

Has the End of Period Statement (EOPS) been removed?

Yes. HMRC has removed the formal EOPS process; you’ll make your final declaration via compatible software.

How do late penalties work under MTD?

Late submission uses a points system (£200 fine when the points threshold is reached). Late payment penalties escalate: no penalty if paid within 15 days; 3% at day 15; a further 3% at day 30; then a daily penalty at 10% per year from day 31 until paid (VAT already live; ITSA aligns on rollout).

Making Tax Digital (MTD)

MTD is HMRC’s programme to move VAT and Income Tax to digital record-keeping and reporting. VAT is already live; Income Tax (ITSA) is phased from April 2026.

What is Making Tax Digital?

MTD requires compatible software to keep digital records and send updates to HMRC. It aims to cut errors and modernise tax admin. MTD for VAT is mandatory for all VAT-registered businesses. MTD for ITSA brings quarterly updates and a software-based year-end process for sole traders and landlords.

Who’s in scope and when?
ITSA mandation is based on gross income from self-employment and/or property: £50k from 6 Apr 2026, £30k from 6 Apr 2027. The government has set out plans to legislate a £20k threshold (bringing those taxpayers in from April 2028

At a glance

VAT: live since 2019/2022 expansion; new penalties from 2023 revised in 2025.
ITSA: 2026–2028 phased rollout; EOPS removed; cumulative updates.
Software-only filing: end-of-year final declaration must be via MTD software.

Latest developments (2025)

Timeline

From 6 Apr 2026: ITSA for £50k+ income.
From 6 Apr 2027: ITSA for £30k+ income.
Planned: £20k threshold legislated for 2026/27, meaning mandating from Apr 2028.

Design changes

EOPS removed; final declaration only.
Quarterly updates become cumulative.
Joint landlords easing & specific exemptions (e.g., foster carers, no NINO).
Multiple agents support in development.

Penalties

Late submission: points-based. £200 fine when the threshold is reached (quarters: 4 points).
Late payment (VAT now; ITSA as it rolls out): no penalty if paid within 15 days; 3% at day 15; another 3% at day 30; then a daily penalty at 10% p.a. from day 31 until paid. Interest also applies.

Summary

Aspect	Details
Scope	VAT (live); ITSA phased 2026–2028.
Thresholds	£50k (2026/27), £30k (2027/28), plan for £20k (2028/29).
Requirements	Digital records; quarterly updates; software final declaration.
Penalties	Submission: points-based (£200 at threshold). Payment: 15/30/31+ day escalators as above.
Key changes	EOPS removed; cumulative quarterly updates; multi-agent; landlord easements; exemptions.

What you should do

Use MTD-compatible software (Xero, QuickBooks, Sage, FreeAgent).
Track your gross income in 2024/25–2027/28 to see when you fall into mandating.
Prepare for software-only final declarations under ITSA.

Understand the points-based late submission regime.
Avoid late payment penalties (15/30/31+ days) by paying or arranging Time-to-Pay early.
Ask us for an MTD readiness review and software setup.