MTD for ITSA: What Side Hustlers and Seasonal Sole Traders Need to Know
If you’ve got a side hustle – whether it's flipping items on Vinted, freelancing in your spare time, or doing the odd job around Christmas – there’s a big change coming to the way you report your income to HMRC.
It’s called Making Tax Digital for Income Tax Self Assessment (MTD for ITSA), and it starts rolling out in April 2026.
Here’s what it means for self-employed people in the UK, especially side hustlers with seasonal or part-time income.
💡 What is MTD for ITSA?
MTD for ITSA is part of HMRC’s plan to modernise the tax system.
Right now, if you’re self-employed, you likely file one tax return per year through Self Assessment.
But under MTD, you’ll need to:
✅ Keep digital records
✅ Submit updates every 3 months
✅ Use MTD-compliant software (like Xero, FreeAgent or QuickBooks)
You’ll also submit a final end-of-year update to confirm figures and make adjustments.
🧾 Who Will Be Affected First?
If your total self-employed and/or rental income is over £50,000, MTD for ITSA will apply to you from April 2026.
If you earn £30,000–£50,000, your start date will be April 2027.
Below £30,000? You’re not in scope yet – but HMRC has said it’s reviewing the threshold. So keep an eye out! 👀
⏳ Seasonal Income? You Still Report Quarterly
Many side hustlers don’t earn income every month.
Maybe your Etsy shop only gets busy during Christmas, or you do freelance gigs in the summer.
Even if you don’t earn anything for one quarter, you’ll still be required to submit a "nil return" through your accounting software.
✅ No income? You still report.
✅ Only work 3 months of the year? You still submit 4 updates.
🧠 What Side Hustlers Should Do Now
Even if you’re below the income threshold, getting into good habits now is a smart move.
Here’s how to prepare:
Track income and expenses digitally from the start
Choose a system (spreadsheet or software) that’s easy to update quarterly
Budget for tax in real-time – no more surprises in January
Keep separate records for personal and business transactions
Save for tax using a percentage of each payment received
👉 Our Side Hustler Companion spreadsheet is a beginner-friendly tool that helps you stay compliant and in control.
🔍 Why This Matters (Even If You’re Just Hustling on the Side)
Let’s be real – this shift feels like a lot for people who aren’t “doing business” full-time.
But it’s not about making your life harder. It’s about:
📈 Seeing how your side hustle is growing (or not)
💡 Catching missed expenses you could claim
⏰ Spreading tax admin out – so it’s less stressful
💸 Avoiding last-minute tax bills
It also opens the door to scaling your hustle into a business – because you'll already have the systems in place.
🛠 Final Thoughts: Start Now, Stress Less
MTD for ITSA might sound like a headache, but it’s also a chance to take control of your finances and make your side hustle feel like a real business.
Don’t wait until you’re forced to go digital – ease in now, and by the time April 2026 rolls around, you’ll be flying.
Need help getting started? We’ve got resources for side hustlers, freelancers, and seasonal earners.
From digital trackers to friendly advice, Hustle Mate has your back.
