From April 2026, hundreds of thousands of freelancers, contractors and sole traders will have to report their tax differently, as Making Tax Digital for Income Tax Self Assessment (MTD ITSA) begins for higher earners.
Sole traders and landlords with qualifying income over £50,000 will be required to keep digital records and submit quarterly updates to HMRC from April, replacing the usual annual Self Assessment process.
From April 2027, those with qualifying income over £30,000 will also be required to file quarterly returns.
With this in mind, ByteStart partner ANNA Money has announced it will offer free MTD ITSA quarterly filings on a permanent basis to all sole traders and landlords, with no strings attached.
A shift from annual returns to year-round reporting
MTD ITSA represents a fundamental change to how the self-employed file their tax returns.
Currently, all sole traders submit an annual tax return via self assessment – this is due by 31st January following the end of the previous tax year.
Those required to file under MTD must maintain digital records throughout the year and submit updates to HMRC every quarter.
Recent research suggests many self-employed people are underprepared for the April 2026 rollout, particularly those who rely on spreadsheets and haven’t upgraded to accounting software.
Earlier this month, we reported that large numbers of sole traders are not ready for the MTD Income Tax deadline, despite the extended lead-in period.
The change also comes at a time when freelancers are already under pressure from rising living costs, higher taxes, and a difficult economy.
ANNA’s approach is to bundle MTD ITSA submissions into its business account and tax app, rather than charging an additional monthly fee, which is common across much of the accounting software market.
ANNA’s position
Boris Diakonov, co-founder and co-CEO of ANNA Money, said the shift to quarterly reporting represents a significant increase in admin for many self-employed workers.
“For freelancers and contractors, MTD ITSA means moving from filing once a year to managing tax all year round. That’s a big change for people who already juggle clients, projects and deadlines. By offering free MTD filings forever, we’re trying to remove cost as a barrier.”
While many MTD-compatible tools are priced on a subscription basis, ANNA says its free model is intended to allow freelancers to meet HMRC’s requirements without taking on another ongoing expense.
Who the offer applies to
ANNA’s free MTD ITSA service is available to freelancers, contractors and sole traders who fall within the scope of the new rules. Under the current timetable:
- Self-employed individuals with qualifying income over £50,000 must comply from April 2026
- Those earning over £30,000 will join from April 2027
ANNA Money is an app-based business account used by more than 100,000 UK businesses. Alongside banking, it offers tools for invoicing, expense tracking and tax preparation.
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Fully compatible with Making Tax Digital (MTD) for sole traders from April 2026.
Read ByteStart’s review of the ANNA business account.
Prepare early for MTD Income Tax
With the first phase of MTD ITSA merely months away, HMRC has repeatedly encouraged self-employed workers to prepare early rather than wait until the deadline approaches.
For many freelancers, that preparation involves moving away from manual systems such as spreadsheets and getting used to maintaining digital records throughout the year.
As penalties for non-compliance are expected to apply once the system is fully live, the transition period is likely to be a testing one for smaller businesses.
For more information, read Making Tax Digital guide for the self-employed, our overview of MTD Income Tax exemptions and MTD ITSA deadlines.