HMRC Making Tax Digital: the official steps and where to click
Last updated: · Prices checked on vendor sites on 31 October 2026
HMRC's process for Making Tax Digital for Income Tax (MTD for ITSA) has five steps: check whether you need it, choose HMRC-recognised software, sign up on GOV.UK, send quarterly updates from your software, then submit your tax return by 31 January. HMRC does not provide its own filing software.
The official steps, with the right GOV.UK links
Step 1: Check if and when you need to use it
GOV.UK explains the thresholds and has a checker based on your qualifying income.
Check on GOV.UKStep 2: Choose compatible software
HMRC does not provide software. Use its finder to see recognised products, or compare them on our site.
Open HMRC software finderStep 3: Sign up for MTD for ITSA
Use the same user ID and password you got when you registered for Self Assessment. You still file a Self Assessment return for the year before you start.
Sign up on GOV.UKStep 4: Send quarterly updates
Send summaries of income and expenses from your software by 7 August, 7 November, 7 February and 7 May.
Quarterly update guidanceStep 5: Submit your tax return
Add any other income and submit your tax return through software by 31 January after the tax year ends.
All MTD for ITSA guidance
Step 2 is where most people get stuck. Use our 3-question picker, the HMRC-recognised software list, the bridging software guide, or FreeAgent vs Xero.
Common myths about HMRC MTD
| Myth | What GOV.UK says | Source |
|---|---|---|
| HMRC gives you free software to file. | HMRC does not provide software. You or your agent need commercial software, though some recognised products are free. | Choose the right software for Making Tax Digital for Income Tax |
| Quarterly updates are four tax returns a year. | They are summaries of your self-employment and property income and expenses, not tax returns. You still file one tax return. | Use Making Tax Digital for Income Tax: send quarterly updates |
| You have to give up spreadsheets. | You can keep spreadsheets if you use software that connects to them (bridging software). | Choose the right software for Making Tax Digital for Income Tax |
| You will be fined straight away for a late quarterly update. | There are no penalties for missing a quarterly update deadline in the 2026 to 2027 tax year. Penalty points apply after that. | Penalties for Making Tax Digital for Income Tax |
| If you never signed up, it does not apply to you. | From September 2026 HMRC started signing up people who need to use it for 2026 to 2027 and had not done so. | Check what to do if HMRC has signed you up for Making Tax Digital for Income Tax |
| Your salary counts towards the threshold. | Only self-employment and property income before expenses counts. Employment (PAYE) pay does not. | Work out your qualifying income for Making Tax Digital for Income Tax |
Ready for step 2?
- Cheapest: My Tax Digital. Free, HMRC-recognised for quarterly updates and the tax return.Visit My Tax Digital
- Best value for landlords: Xero. £7 a month excl. VAT. HMRC’s finder lists UK and foreign property as Ready now.Visit Xero
- Best for sole traders: FreeAgent. VAT, payroll and PAYE income ready now; free with some banks.Visit FreeAgent
For thresholds, deadlines and penalties in one place, read the MTD for ITSA guide.
Sources (GOV.UK)
- Sign up for Making Tax Digital for Income TaxSource: GOV.UK, published , updated
- Check what to do if HMRC has signed you up for Making Tax Digital for Income TaxSource: GOV.UK, published , updated
- Choose the right software for Making Tax Digital for Income TaxSource: GOV.UK, published , updated
- Making Tax Digital for Income Tax (GOV.UK collection)Source: GOV.UK, published , updated
- Find out if and when you need to use Making Tax Digital for Income TaxSource: GOV.UK, published , updated
Frequently asked questions
Does HMRC provide free MTD software?
No. GOV.UK says you, or an agent, need commercial software that works with MTD for ITSA. HMRC runs a software finder that lists recognised products, including free ones.
Will HMRC sign me up for MTD automatically?
From September 2026, HMRC started signing up people who need to use MTD for ITSA for 2026 to 2027 and had not signed up themselves. It contacts you after it has done so.
Are quarterly updates the same as tax returns?
No. GOV.UK describes quarterly updates as summaries of your self-employment and property income and expenses. You still submit a tax return through your software by 31 January after the tax year ends.
Do I still need to file a Self Assessment return for the year before I start?
Yes. GOV.UK says you still need to submit a Self Assessment tax return for the tax year before you start using MTD for ITSA.