MTD for Income Tax on a spreadsheet: what landlords and sole traders need to do

If your business records already live in a spreadsheet, Making Tax Digital doesn't mean starting again. Here's what the rules actually require — and how to meet them without abandoning the sheet you already use.

A practical guide for sole traders and landlords · updated for the 2026/27 tax year

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax Self Assessment (MTD for Income Tax, or MTD ITSA) is HMRC's shift away from the once-a-year tax return for self-employed people and landlords. Instead of filing a single Self Assessment after the tax year ends, affected taxpayers must keep their income and expense records digitally and send HMRC a summary every quarter using compatible software.

The goal, in HMRC's words, is a more up-to-date picture of your tax position through the year. In practice it means two changes for most people: your records have to be digital, and you report four times a year instead of once.

Who has to comply, and when?

MTD for Income Tax is being introduced in stages, based on your gross income from self-employment and property (turnover, not profit):

• From April 2026 — if your combined self-employment and property income is over £50,000.
• From April 2027 — if it's over £30,000.
• From April 2028 — if it's over £20,000.

The figure that matters is your gross income across all your sole-trade and property businesses combined, as reported on your Self Assessment. If you're close to a threshold, it's worth checking each year, because crossing it brings you into the rules.

What MTD actually requires

Three things, once you're in scope:

1. Digital records

You must keep a digital record of each item of income and expense — the date, the amount, and the category it falls under. A spreadsheet counts as a digital record, provided the figures are captured digitally rather than kept on paper and typed in at the end.

2. Quarterly updates

Four times a year, you send HMRC a cumulative summary of your income and expenses for each business. These aren't your final figures — they're running totals — and they don't need every adjustment finalised. The standard quarterly periods and deadlines are:

• Quarter 1 (6 April – 5 July) — due 7 August
• Quarter 2 (6 April – 5 October) — due 7 November
• Quarter 3 (6 April – 5 January) — due 7 February
• Quarter 4 (6 April – 5 April) — due 7 May

3. A digital link — no re-typing

This is the requirement people miss. The numbers you send HMRC must flow from your digital records to the submission by a digital link — a formula, a reference, or software — not by reading a total off one screen and manually typing it into another. Manual re-keying breaks the digital link and isn't compliant.

4. A year-end Final Declaration

After the fourth quarter, you finalise the year with a Final Declaration (the modern replacement for the Self Assessment return), confirming your figures and any adjustments. This is a separate step from the quarterly updates.

Can you still use a spreadsheet?

Yes. HMRC does not require you to move to a full accounting package. What it requires is that your records are digital and that they reach HMRC through compatible software via a digital link. A spreadsheet plus bridging software — software that reads your figures and submits them to HMRC's systems — satisfies both.

For a lot of sole traders and landlords, that's the sensible path: the spreadsheet you already understand stays exactly as it is, and a small piece of software handles the digital link and the submission. No new system to learn, no monthly subscription to a platform you didn't want.

What "MTD-compatible software" means for spreadsheet users

HMRC keeps a list of software that's recognised for MTD for Income Tax. To be usable for you, a tool needs to:

• let you keep records in the categories HMRC expects for self-employment and UK property;
• pull those figures through by a digital link, with no manual re-typing at submission;
• send the quarterly cumulative updates to HMRC and store the receipt.

Bridging tools that sit on top of a spreadsheet do exactly this, without turning your records into someone else's format.

A short compliance checklist

1. Work out whether you're over the current threshold (gross self-employment + property income).
2. Get your records into a digital format with the right categories.
3. Make sure the totals reach HMRC by a digital link — not manual typing.
4. Diarise the four quarterly deadlines (7 Aug, 7 Nov, 7 Feb, 7 May).
5. Choose recognised software that fits how you already work.
6. Finalise each year with the Final Declaration.

This guide is general information about Making Tax Digital for Income Tax, not personal tax advice. Rules and thresholds can change — check the current position on GOV.UK or with your accountant for your own circumstances.