Making Tax Digital quarterly filing: what UK freelancers must prepare

Summary

Updated October 2025 — Sources: GOV.UK Making Tax Digital for Income Tax.

Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) requires eligible taxpayers to keep digital records and submit quarterly updates to HMRC. This is separate from — but replaces parts of — the traditional annual paper return workflow.

1. The MTD cycle

1. Quarterly updates — summary of income and allowable expenses every three months
2. End-of-period statement (EOPS) — finalise figures for the tax year with adjustments
3. Final declaration — confirm overall tax position including other income sources

2. Who is affected

MTD ITSA applies to sole traders and landlords with qualifying income above mandated thresholds. The rollout is phased: from April 2026 for income over £50,000, April 2027 for over £30,000, and April 2028 for over £20,000. Partnerships follow later.

3. Digital record-keeping requirements

Records must be digital, not shoebox receipts. This means structured ledgers with dates, amounts, and categories. Bank feeds, invoicing tools, and accounting software all qualify when they meet HMRC functional compatible standards.

4. Practical preparation checklist

• Choose MTD-compatible software before your mandate date
• Separate business and personal transactions
• Categorise expenses consistently from day one
• Set calendar reminders for quarterly deadlines
• Train yourself on EOPS adjustments (use of home, capital allowances)

5. Sources

• GOV.UK — MTD for Income Tax
• GOV.UK — compatible software