Making Tax Digital for Income Tax, what tattoo artists need to know
TL;DR: Making Tax Digital for Income Tax replaces the annual return with digital record-keeping and quarterly updates through recognised software. It is mandated from April 2026 for qualifying income over £50,000, April 2027 over £30,000, and April 2028 over £20,000, based on gross income before expenses. Most working UK tattoo artists are in scope by April 2027 or April 2028.
Making Tax Digital for Income Tax, what tattoo artists need to know
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) replaces the annual paper-or-online tax return with digital record-keeping and quarterly updates through HMRC-recognised software. The phased rollout hits self-employed people at progressively lower turnover thresholds. Most working tattoo artists will be in scope by April 2027 or April 2028. This guide describes the timeline, what changes, and how to prepare.
The timeline
The schedule per the HMRC MTD ITSA policy paper and the March 2026 policy paper reducing the threshold to £20,000:
| From | Threshold | Who's mandated |
|---|---|---|
| 6 April 2026 | £50,000 | Self-employed people and landlords with qualifying income over £50,000 in 2024-25 |
| 6 April 2027 | £30,000 | Self-employed people and landlords with qualifying income over £30,000 in 2025-26 |
| 6 April 2028 | £20,000 | Self-employed people and landlords with qualifying income over £20,000 in 2026-27 (announced March 2026) |
"Qualifying income" is gross trading + property income for the relevant base year, before expenses, not net profit.
Practical mapping for tattoo artists
| Annual gross turnover | When you're mandated |
|---|---|
| £20,000-£30,000 | April 2028 |
| £30,000-£50,000 | April 2027 |
| £50,000+ | April 2026 |
| Under £20,000 | Not mandated under current rules (but watch for further announcements) |
A working full-time tattoo artist doing £25,000-£40,000/year is therefore looking at April 2027 or April 2028 mandation. Studio owners and busy multi-chair operators with chair rental income are commonly in the April 2026 bracket.
What changes under MTD ITSA
Digital records mandatory
You must keep digital records of:
- Every transaction (date, amount, category).
- Linked to digital evidence (digital photo of receipt, electronic invoice).
- In MTD-compatible software (not paper notebooks, not non-compatible spreadsheets).
The detail is in the Income Tax (Digital Requirements) Regulations 2021.
Quarterly updates
Four times a year, you submit a quarterly update to HMRC through your software. The update is a summary of:
- Total income.
- Total expenses by category.
- Submitted within 5 weeks of the end of each quarter.
Quarters run:
- Q1: 6 April to 5 July (submit by 5 August)
- Q2: 6 July to 5 October (submit by 5 November)
- Q3: 6 October to 5 January (submit by 5 February)
- Q4: 6 January to 5 April (submit by 5 May)
These are provisional submissions, no payment due, no penalty for slightly imperfect data, but HMRC sees a running picture of your year.
End-of-year declaration
After Q4, you submit a final declaration confirming the figures for the year, claiming any allowances, and finalising the tax position. This replaces the annual SA100 return. Filed by 31 January following the end of the tax year, same deadline as the existing Self Assessment.
Payment dates unchanged
- Balancing payment for the year: 31 January following.
- Payments on account: 31 January and 31 July.
See payments on account for the existing payment pattern, which MTD ITSA does not change.
What software you need
HMRC publishes a list of MTD-recognised software. Options for 2025-26 include:
Low-cost / free
- QuickFile, free for small businesses below a transaction limit, MTD-compatible.
- FreeAgent, free with selected business bank accounts (Mettle, NatWest, Royal Bank of Scotland, Ulster Bank business accounts).
- HMRC's own basic-record-keeping tool for ultra-simple cases (limited functionality).
Mid-range paid
- FreeAgent standalone: £20-£30/month.
- Xero: £15-£30/month for basic plans.
- QuickBooks Self-Employed / Online: £10-£25/month.
- Sage Accounting: £15-£30/month.
What to look for
- MTD ITSA-recognised (check the HMRC list).
- Bank-feed connection to your business bank account.
- Receipt capture (phone photo → linked to transaction).
- Mileage tracking.
- Category-based expense reporting.
- Export to your accountant.
- Customer support if you need help.
Most working tattoo artists do well with FreeAgent or QuickBooks at £10-£25/month, with bank feeds set up and a daily-or-weekly habit of capturing receipts.
Cash basis remains available
The cash basis option (under ITTOIA 2005 ss.31A-31F) remains available under MTD ITSA. Most tattoo artists qualify and stay on cash basis, simpler record-keeping, transactions captured when paid rather than when earned.
The shift is therefore not "cash basis to accruals", it's "manual records to digital records." The principles you already use mostly carry over.
How to prepare
If you'll be mandated April 2026 (over £50k turnover in 2024-25), you should have software set up and operating now. The transition from paper or spreadsheet to MTD-recognised software takes a few weeks to settle into the habit.
If you'll be mandated April 2027 or April 2028, sensible prep:
12 months before mandation
- Choose your software (research, free trials, accountant input).
- Open or designate a business bank account if you don't have one.
- Set up the bank feed in your software.
6 months before
- Switch to digital record-keeping for new transactions.
- Capture receipts via the software's mobile app from now on.
- Reconcile bank transactions weekly.
At mandation
- Stop the manual or spreadsheet system.
- Operate fully in the software from 6 April of the relevant year.
- Submit your first quarterly update within 5 weeks of the first quarter end.
What if you're under the threshold
Under £20,000 qualifying income, you're not currently mandated. You can still use MTD ITSA voluntarily, many artists do, because the discipline of bank-fed digital records is operationally useful regardless of MTD obligation.
Watch for further policy changes. The threshold has dropped repeatedly (originally £10k, then deferred, then phased at £50k/£30k, now adding £20k). The direction of travel is "more people in scope over time."
What if your income fluctuates
The mandation is based on your qualifying income in the base year (typically the year ending two years before mandation starts). Once mandated, you stay in MTD ITSA even if your income drops below the threshold in later years, unless HMRC's exit criteria are met.
For tattoo artists with seasonal or fluctuating books, this means a single high year can pull you in for years afterward, but the system is still operationally manageable as long as your software is set up and habit is established.
What this guide cannot do
MTD ITSA detail is evolving as HMRC publishes guidance and updates. Specific software features change.
Information, not advice. For your situation, check the HMRC MTD ITSA pages for the current position, work with an accountant familiar with MTD ITSA, and choose software you'll actually use day-to-day.