MTD ITSA: Free Quarterly Filings & Less Admin in 2026

From April 2026, many UK sole traders and landlords will stop doing tax as a once-a-year scramble and start doing it every quarter. If you’re already running a lean operation—selling online, managing clients, and trying to grow—this isn’t “just another compliance tweak”. It’s a permanent change to your weekly workflow.

And here’s the part most people miss: MTD ITSA isn’t only a tax change, it’s an operations change. The businesses that treat it like a simple filing requirement will feel buried by admin. The ones that treat it as an automation project will buy back time.

As part of that shift, ANNA Money has announced free Making Tax Digital for Income Tax Self Assessment (MTD ITSA) quarterly filings on a permanent basis for sole traders and landlords who fall within scope—plus the full MTD Self Assessment in year one (including the final return) inside its business account and tax app.

This post breaks down what’s changing, who it affects, and how to set up a lightweight, digital record-keeping system that supports business growth—and, in the context of the Climate Change & Net Zero Transition series, why getting your “business plumbing” right is a surprisingly practical step towards lower-carbon, more efficient working.

What’s changing with MTD ITSA (and who it hits first)

Answer first: MTD ITSA replaces the annual Self Assessment rhythm with digital records plus quarterly updates to HMRC for people above certain income thresholds.

The rollout dates that matter

The current timetable is straightforward:

• From April 2026: sole traders and landlords with qualifying income over £50,000 must comply.
• From April 2027: the threshold drops to over £30,000.

“Qualifying income” generally refers to income from self-employment and/or property. If you’re close to the thresholds, don’t wait for “future you” to deal with it—many people will tip over due to a strong year, price rises, or taking on one extra retainer.

What quarterly reporting really means in practice

Quarterly updates don’t mean you’ll pay tax four times a year (that’s a separate issue people often worry about). What it does mean is:

• You’ll need digital record keeping that’s up to date.
• You’ll submit four updates during the tax year.
• You’ll still complete an end-of-period process (finalisation) to confirm your tax position.

The operational reality: you’re moving from “tax day” to “tax system”. That’s the mindset shift.

Why quarterly reporting is an admin trap for solopreneurs

Answer first: quarterly reporting creates friction because it adds recurring deadlines—so any messy process gets multiplied by four.

If you run a solo business, admin is already a tax on your focus. Quarterly reporting amplifies common weak spots:

Spreadsheets don’t fail once—they fail repeatedly

Spreadsheets aren’t evil. They’re just fragile when the rules change. The typical spreadsheet workflow depends on you remembering to:

• capture every expense (and find the receipt later),
• categorise it correctly,
• reconcile bank activity,
• keep a running tally of income,
• and avoid formula mistakes.

Under annual Self Assessment, you could patch a messy year in January with a few late nights. Under MTD ITSA, that mess returns every quarter.

Context switching is the real cost

Most solopreneurs don’t struggle because they can’t do admin. They struggle because admin breaks deep work.

Every time you stop to sort receipts, chase invoices, or re-check categories, you’re paying in:

• lost concentration,
• slower delivery,
• and fewer sales activities.

If your goal is growth, the question isn’t “How do I file?” It’s “How do I make filing almost automatic?”

Net zero angle: digital admin reduces unnecessary travel and paper

This series focuses on the net-zero transition—renewables, green jobs, sustainable transport, and practical steps that reduce waste.

MTD nudges small businesses towards paperless, digital-first operations. Done well, it reduces:

• printing and storing paper records,
• unnecessary trips to accountants for document drop-offs,
• and rework caused by missing documentation.

It’s not going to “save the planet” on its own, but it’s the same principle as energy efficiency: small operational efficiencies compound.

ANNA Money’s free MTD ITSA filings: what it is (and what to check)

Answer first: ANNA Money says it will provide free MTD ITSA quarterly submissions forever for sole traders and landlords in scope, bundled into its app-based business account.

According to the announcement (via ByteStart), ANNA’s approach is to include MTD ITSA submissions inside the product instead of adding another monthly fee—something that’s common across accounting software.

ANNA also says customers get the full MTD Self Assessment (including the final return) free in year one, plus “Auto Accountant” features so quarterly filings are prepared automatically and ready to submit with a few clicks.

Why “free filings” matters (even if you can afford software)

I’m opinionated on this: cost isn’t the biggest issue—habit is. But pricing does influence whether people commit early.

A free option can be useful if you’re:

• testing a new workflow before you standardise it,
• trying to keep overheads low while you invest in marketing/sales,
• or you simply want fewer subscriptions.

The checks I’d do before switching tools

“Free” is great. “Free and fits your workflow” is better. Before you move any financial process, sanity-check:

• Banking fit: does the business account support the way you get paid (invoicing, card payments, transfers)?
• Expense capture: can you capture receipts quickly on your phone the moment you buy something?
• Categories and reporting: can you easily see income/expenses by category (useful for both tax and decision-making)?
• Export and accountant access: if you use an accountant, can you share data cleanly?
• MTD compatibility: confirm it’s specifically aligned to MTD for Income Tax (MTD VAT is different).

The goal is fewer tools, fewer handoffs, fewer things to remember.

“MTD ITSA means moving from filing once a year to managing tax all year round.” — Boris Diakonov, ANNA Money (as reported by ByteStart)

That’s the right framing. Managing it all year round only works if the system is easy.

A simple MTD ITSA setup that supports growth (not just compliance)

Answer first: build a weekly “money maintenance” routine, automate capture, and treat quarterly updates as a by-product of clean records.

Here’s a practical approach I’ve found works for solopreneurs who want to scale without drowning in admin.

Step 1: Choose one “source of truth” for transactions

If your income and expenses are scattered across personal accounts, PayPal, multiple cards, and random apps, MTD will feel painful.

Pick:

• one primary business account,
• one primary expense card,
• and one tool where transactions flow in automatically.

You can still use specialist tools for specific needs, but your day-to-day money should have a “home”.

Step 2: Do a 15-minute weekly money review

Quarterly reporting is easy when your records are never more than seven days behind.

Calendar a weekly slot (Friday afternoon works well) and do:

1. Categorise transactions you recognise.
2. Attach receipts for anything that needs evidence.
3. Flag unknowns (subscriptions you forgot, duplicate charges, odd fees).
4. Check invoices: what’s overdue, what needs chasing.

Fifteen minutes a week beats five hours every quarter.

Step 3: Create “quarterly-ready” categories

A messy chart of categories creates messy reports. Keep it boring and consistent.

A simple structure for many solo service businesses:

• Sales / revenue
• Subcontractors / freelancers
• Software subscriptions
• Marketing & advertising
• Travel (and note: travel reduction is a net-zero win)
• Office/home office costs
• Professional fees (accountant, legal)
• Training

The point isn’t accounting perfection. It’s fast, repeatable classification.

Step 4: Treat tax estimates like cashflow forecasting

Quarterly updates force you to look at your numbers more often. Use that to your advantage.

Each week (or month), answer:

• What did I earn?
• What did I spend?
• What’s my rough profit?
• What should I set aside for tax?

When you do this consistently, growth gets easier because you stop guessing.

Step 5: Build a low-carbon operations habit while you’re at it

If you’re already tightening your systems for MTD, it’s a good time to reduce waste:

• switch to paperless receipts,
• reduce in-person errands where digital options exist,
• consolidate deliveries and purchases,
• and review subscriptions that quietly drain money and resources.

Net zero transition isn’t only about heavy industry. It’s also about millions of small operational choices.

Common MTD ITSA questions solopreneurs are asking right now

Answer first: most questions are about thresholds, deadlines, penalties, and whether you can keep using spreadsheets.

“Can I keep using spreadsheets?”

You can keep spreadsheets for internal tracking, but MTD ITSA is designed around digital record keeping and compatible submissions. Practically, most people will need software (or a bridging approach) that can produce and submit updates in the format HMRC requires.

If spreadsheets currently work only because you clean them up once a year, that’s the warning sign.

“Will HMRC penalise mistakes immediately?”

Penalties and enforcement typically ramp up once systems are fully live. The safest assumption is: the sooner you practise the workflow, the fewer nasty surprises you’ll have.

“What should I do in February 2026?”

Right now (early February 2026), you’ve got a narrow but workable window to:

• pick your tool,
• test your categories,
• practise weekly reviews,
• and run a mock quarter using recent months of transactions.

If you wait until late March, you’re turning it into a stressful migration project.

The real win: turning compliance into capacity

MTD ITSA is happening, and for higher earners it’s close. ANNA Money’s move to offer free quarterly MTD ITSA filings is a useful signal: the market is adjusting, and some providers are trying to remove cost friction.

But the bigger opportunity is yours. If you set up digital records properly now, quarterly updates become boring—and boring is good. It frees you to do the work that grows your business: shipping projects, marketing consistently, and improving your offer.

In the net-zero transition context, there’s also a quieter benefit: digital-first admin reduces paper, repeat journeys, and wasteful processes. That’s operational efficiency with a sustainability upside.

So here’s the question to take away: what would you do with an extra half-day each month if your tax admin ran itself?