Making Tax Digital Readiness Calculator Trending
Check if MTD for Income Tax applies to you. See deadlines, requirements and software costs.
By Konstantin Iakovlev · Founder, Calks.uk
Last updated: · Verified against HMRC and GOV.UK 2026/27 rates
MTD for Income Tax applies from April 2026
Income £55,000.00 exceeds £50,000 threshold
What MTD means for you:
• Keep digital records using HMRC-compatible software (~£150.00/year)
• Submit 4 quarterly updates + 1 end-of-year declaration
• Replaces annual self-assessment tax return
• Deadline: April 2026 (over £50K) or April 2027 (over £30K)
Disclaimer
This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.
How It Works
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) launches in April 2026 for self-employed individuals and landlords with gross income above £50,000. It requires quarterly digital submissions of income and expense summaries to HMRC using compatible software, plus a final end-of-period statement.
Under MTD, you submit updates for four quarterly periods: April to July, August to October, November to January and February to March. Each update summarises your business income and allowable expenses for that period. A final declaration replaces the current Self Assessment tax return and is due by 31 January following the tax year.
This calculator estimates your quarterly submission amounts based on your projected annual income and expenses. It helps you understand what each quarterly update will look like and plan your cash flow for tax payments. Those with income between £30,000 and £50,000 join from April 2027.
MTD (Making Tax Digital) UK 2026. HMRC's digitisation programme. Phase 1 (VAT) since April 2019; all VAT-registered since April 2022. Phase 2 (Income Tax Self Assessment): MANDATORY from April 2026 for sole traders + landlords with combined turnover £50,000+. April 2027: extends to £30k+. Below £20k delayed indefinitely. Required: keep records in MTD-compatible software; submit quarterly updates; final declaration annually.
MTD ITSA dates 2026/27. Tax year 2026/27 first MTD year (started 6 April 2026). Quarterly updates due 5 weeks after each quarter-end: 5 August 2026 (Q1 Apr-Jun); 5 November 2026 (Q2); 5 February 2027 (Q3); 5 May 2027 (Q4). Final declaration: 31 January 2028 (replacing Self Assessment annual return). Penalties similar to MTD VAT: £200 fixed for late + surcharges.
MTD-compatible software 2026. Major UK options: FreeAgent (free with NatWest/RBS business banking); Xero (£14/month basic); QuickBooks (£10/month); Sage (£14/month); FreshBooks. Spreadsheets + bridging software: cheaper for very simple businesses. HMRC publishes approved software list. Choose: cloud-based for backups; bank feed integration; landlord-specific features if rental.
What records to keep digitally. Income and expenses (date, amount, description). VAT input/output if VAT-registered. Receipts: scan into software OR keep paper 5 years. 'Digital link' rule: no manual re-typing between source and submission. Bank statements: automated feed reduces errors. HMRC checks random + risk-based. Significant penalties for non-compliance once MTD applies.
Preparing for MTD April 2026. Step 1: estimate 2024/25 turnover. £50k+ from self-employment/property: MTD applies April 2026. Step 2: choose MTD-compatible software 12+ months before. Step 3: digitise records, set up bank feeds, categorise income/expenses. Step 4: file 2024/25 Self Assessment normally (final pre-MTD year). Step 5: first MTD quarterly update 5 August 2026. First year: use accountant £600-£1,500.
Example: Self-employed, £72,000 annual income, £18,000 expenses
- Quarterly income (average): £72,000 ÷ 4 = £18,000
- Quarterly expenses (average): £18,000 ÷ 4 = £4,500
- Quarterly profit submitted to HMRC: £13,500
- Annual profit: £54,000
- Estimated tax + NI due: approx. £12,800
Frequently Asked Questions
- What does the Making Tax Digital Readiness Calculator do?
- Check if MTD for Income Tax applies to you. See deadlines, requirements and software costs.
- Is this calculator updated for the 2026/27 tax year?
- Yes. This calculator uses the latest HMRC rates and thresholds for the 2026/27 UK tax year, which runs from 6 April 2026 to 5 April 2026. Rates are verified against official HMRC publications.
- Do I need to tell HMRC about this?
- Whether you need to report to HMRC depends on your individual circumstances. If you are unsure, check GOV.UK or contact HMRC directly. This calculator provides estimates for guidance only.