Self Assessment vs MTD for Income Tax – Which One Applies to You?
Two Systems, One Question
If you’re self-employed, a landlord, or earning income outside PAYE, you’ve probably heard both terms: Self Assessment and Making Tax Digital (MTD) for Income Tax.
But which one actually applies to you? And do you need to do both?
At Rothstone Accountants, we see this confusion all the time. Some clients are filing Self Assessments when MTD rules will soon apply. Others are assuming MTD has replaced everything already (spoiler: it hasn’t). The reality is: your obligations depend on your income level, how you earn it, and when the phased MTD rollout reaches you.
Self Assessment in Plain English
Self Assessment is HMRC’s long-standing system for reporting untaxed income. You need to register if you:
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Are self-employed and earn more than £1,000 in a year.
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Are a landlord with rental income above £1,000.
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Have income that hasn’t been taxed at source (e.g., dividends, foreign income, crypto).
How it works:
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One return per year.
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Due by 31 January after the tax year ends.
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Payment deadlines: 31 January (main balance + first payment on account) and 31 July (second payment on account, if applicable).
For now, this is still the main system most self-employed people use.
What Is MTD for Income Tax?
MTD for Income Tax is HMRC’s big digital transformation project. It’s designed to:
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Replace annual Self Assessment with quarterly digital updates.
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Require you to use HMRC-approved accounting software (no more manual spreadsheets).
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Provide a final “end-of-year statement” instead of a single annual return.
📊 Table 1: Comparing Self Assessment vs MTD for Income Tax
| Feature | Self Assessment | MTD for Income Tax |
|---|---|---|
| Who it applies to | Anyone with untaxed income | Self-employed & landlords with income > £30,000 |
| Filing frequency | 1 return per year | 4 quarterly updates + end-of-year |
| Method | HMRC portal, accountants, or paper | Digital software only |
| Start date | Already in place | Phased rollout (from April 2026) |
👉 Rothstone tip: Even if MTD doesn’t apply to you yet, moving onto digital bookkeeping now means no panic later—and better insights today.
The Rollout Timeline
The government has delayed MTD several times, but here’s the current plan:
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April 2026: MTD mandatory for self-employed and landlords with income over £50,000.
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April 2027: Extended to those with income between £30,000–£50,000.
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Below £30,000? Still under review. For now, you’ll stay on Self Assessment.
This means: for many people, Self Assessment continues until at least 2026/27.
Which One Applies to You Right Now?
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Self-employed earning under £30k → Self Assessment only.
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Self-employed/landlords earning £30k–£50k → Self Assessment until April 2027, then MTD.
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Over £50k → Self Assessment now, MTD compulsory from April 2026.
📌 Example:
A landlord with £42,000 rental income: stays on Self Assessment for 2025/26, moves to MTD in April 2027.
A freelance consultant earning £60,000: stays on Self Assessment in 2025/26, moves to MTD in April 2026.
How Rothstone Accountants Helps You Prepare
The biggest issue we see is that clients wait until the last minute. Switching to MTD means:
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Choosing software.
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Migrating data.
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Learning new processes.
At Rothstone Accountants, we make the transition smooth:
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Assessment: We check whether MTD will apply to you (and when).
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Software setup: We migrate your books to MTD-ready platforms like Xero or QuickBooks.
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Quarterly reporting: We handle submissions, so you don’t have to stress about deadlines.
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Tax planning: We use the new quarterly data to forecast your tax bills earlier—no surprises.
✔️ Checklist: Preparing for MTD
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Am I above the £30k threshold?
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Do I have digital records for income and expenses?
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Am I using HMRC-approved software?
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Have I planned for quarterly submissions?
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Do I have an accountant ready to manage this?
Self Assessment Today, MTD Tomorrow
For now, most self-employed people and landlords are still under the Self Assessment system. But MTD is coming, and it will change how you report, when you report, and the software you must use.
At Rothstone Accountants, we’re helping clients prepare now—so the transition is seamless. Whether you’re a freelancer, a landlord, or a growing business, we’ll make sure you’re compliant today and future-ready tomorrow.
👉 Unsure whether Self Assessment or MTD applies to you? Visit www.rothstone.uk and let Rothstone Accountants guide you.
