MTD for ITSA vs the old Self Assessment: what's actually changing
MTD for ITSA is not a separate tax system from Self Assessment — it is a different reporting mechanism for the same underlying income.
Side-by-side comparison
| Old Self Assessment | MTD for ITSA | |
|---|---|---|
| How often you report | Once a year | Four quarterly updates + one Final Declaration |
| Record-keeping | Any method (spreadsheet, paper, software) | Digital records in MTD-compatible software required |
| What you submit quarterly | Nothing | A summary of income and expenses for the period |
| Year-end submission | Self Assessment tax return | Final Declaration (replaces the SA return) |
| Payment deadline dates | 31 January (and 31 July payment on account, if applicable) | Unchanged |
| Late filing penalties | Fixed late-filing fines | Points-based, covering both quarterly updates and the Final Declaration. One point per missed deadline, £200 once four points are reached |
| Late payment penalties | Existing SA late payment penalty structure | New, more proportional structure — percentage of tax owed, scaling with days late. Dates are unchanged; the calculation is not |
| Who it applies to | All Self Assessment filers | Only sole traders and landlords over the relevant income threshold |
What's new
Quarterly reporting is the headline change: a running summary submitted four times a year, replacing a single annual gathering of records in January. Digital record-keeping becomes mandatory — a shoebox of receipts totalled once a year, legitimate under old Self Assessment, no longer meets the requirement. Records now need to be kept digitally in software that links to HMRC; a spreadsheet only counts when connected via bridging software, not when totals are typed in by hand.
The penalty structure is also new — points-based rather than an immediate fine, and covering the Final Declaration as well as quarterly updates (the full mechanics are covered separately). Late payment penalties move to a similarly proportional structure, even though payment dates themselves are unchanged.
What's staying the same
The Final Declaration deadline is still 31 January — the submission that replaces the old tax return arrives on the same date taxpayers already plan around, just after four quarterly updates rather than instead of them. Payment deadlines are unaffected: tax owed is still due 31 January, with payments on account due 31 July where applicable. The underlying tax calculation is also unchanged — MTD alters how and when income is reported, not tax rates, allowances, or amounts owed. Non-business income — PAYE employment income, dividends, savings interest — is still declared once, at year-end, as part of the Final Declaration.
The practical shift
The change that matters most is rhythm rather than rules. Self Assessment rewarded a single annual push; MTD rewards ongoing reconciliation, because a messy quarter is harder to untangle in the days before a deadline than a messy year was to untangle across the months of runway January used to provide. For anyone used to leaving books until the last minute, this is the point where that habit starts to have a cost — not through one specific penalty, but through compressing three months of catch-up into a few days, four times a year instead of once.
Check how this applies
Our MTD Readiness Checker confirms scope and lists the exact quarterly and annual deadlines that apply.
Related reading:
- What happens if you miss an MTD deadline
- MTD for ITSA deadlines 2026/27: the full calendar
- MTD-compatible software: what "compatible" actually means
This is general guidance, not professional tax advice. Rules can change — check current guidance on GOV.UK or speak to an accountant.