Making Tax Digital for Barristers | MTD ITSA Guide April 2026

Last updated: 28 February 2026

From 6 April 2026, HM Revenue & Customs will require self-employed barristers and those with property income above certain thresholds to keep digital records and file quarterly updates under Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA). This guide explains exactly what MTD means for barristers: who is affected, the quarterly deadlines, what software you need, penalties for non-compliance, and how to prepare.

Who Is Affected?

MTD for ITSA is being rolled out in phases based on gross income thresholds. “Gross income” means total fees received (or receivable) before deducting any expenses. It is not taxable profit.

Phase 1: April 2026 – Gross Income Over £50,000

If your combined gross self-employment income and property income exceeds £50,000 in a tax year, you must comply with MTD for ITSA from the 2026/27 tax year onwards. For most barristers at this level, this means the first quarterly update is due by 7 August 2026.

Phase 2: April 2027 – Gross Income Over £30,000

From the 2027/28 tax year, the threshold drops to £30,000 gross income. Barristers earning between £30,000 and £50,000 in combined self-employment and property income will join the scheme.

Phase 3: To Be Confirmed – Gross Income Over £20,000

HMRC has announced a further extension to those with gross income above £20,000, though the exact start date has not yet been confirmed. The government has indicated this will not be before April 2028 at the earliest.

Important: It Is Gross Income, Not Profit

A barrister whose gross fees total £65,000 but whose taxable profit is only £40,000 after chambers rent and professional expenses is still caught by Phase 1. The £50,000 threshold applies to gross receipts. This catches a large number of barristers who might otherwise assume they fall below the limit.

If you also receive rental income, that is combined with your self-employment income. A barrister earning £35,000 in fees and receiving £20,000 in rental income has combined gross income of £55,000 and falls within Phase 1.

What Must You Do Under MTD?

Keep Digital Records

You must maintain digital records of all income and expenses using MTD-compatible software. Spreadsheets connected to HMRC via bridging software are permitted, but standalone spreadsheets are not. Your records must include:

The date, amount, and category of each transaction
All self-employment income (fees received, fees receivable, and any other practice income)
All allowable expenses (chambers rent, practising certificate, travel, professional subscriptions, insurance, and other deductions)
Property income and expenses (if applicable)

File Quarterly Updates

Instead of a single annual Self-Assessment return, you must send HMRC a summary of your income and expenses four times per year. The quarterly periods and deadlines are:

Quarter	Period Covered	Deadline
Q1	6 April – 5 July	7 August
Q2	6 July – 5 October	7 November
Q3	6 October – 5 January	7 February
Q4	6 January – 5 April	7 May

You may elect to use calendar quarters (1 April – 30 June, etc.) instead if that suits your record-keeping.

Submit an End of Period Statement (EOPS)

After the fourth quarterly update, you must submit an End of Period Statement by 31 January following the tax year. This confirms that the information in your quarterly updates is complete and accurate. Think of it as a final check before your tax position is crystallised.

Submit a Final Declaration

The Final Declaration replaces the current Self-Assessment tax return. It brings together all sources of income and allows you to claim reliefs, make pension contribution elections, and confirm your final tax liability. The deadline remains 31 January after the tax year end.

What Does a Quarterly Update Contain?

Each quarterly update is a summary – not a line-by-line transaction log. You report:

Total income for the quarter
Total expenses for the quarter, broken down by category

You do not need to send copies of receipts or invoices with the quarterly update. However, you must retain your digital records as supporting evidence and have them available if HMRC opens an enquiry.

Software Requirements

HMRC requires you to use software that connects to its systems via the MTD Application Programming Interface (API). The software must be able to:

Store digital records of income and expenses
Submit quarterly updates to HMRC
Receive information back from HMRC (such as tax calculations)
Submit the End of Period Statement and Final Declaration

HMRC publishes a list of compatible software. Popular options for barristers include Xero, FreeAgent, and Sage. Your accountant can advise on the most suitable choice for your practice. Jack Ross can set up and manage the software for you as part of our personal tax return service.

The 2026/27 Soft-Landing Period

For the first year of MTD for ITSA (2026/27), HMRC has confirmed a soft-landing period. During this year:

Late submission penalties will not be charged for quarterly updates submitted within one month of the deadline
You will not receive penalty points for the first four quarterly updates if filed within the grace period
HMRC has stated it will take a “supportive approach” and focus on education rather than enforcement
You must still maintain digital records and submit quarterly updates – the soft-landing applies only to late filing penalties, not to the obligation itself

This does not mean you can ignore the deadlines. The soft-landing is intended to allow for genuine teething problems, not to excuse a failure to prepare.

Penalties for Non-Compliance

From 2026/27, HMRC is using a new points-based penalty system for late submissions, replacing the old fixed-penalty regime. The system works as follows:

Late Submission Penalties

Each late quarterly update, End of Period Statement, or Final Declaration earns one penalty point
When you accumulate 4 penalty points, you receive a £200 penalty
Every subsequent late submission while at the penalty threshold also triggers a £200 penalty
Points expire automatically after 24 months of compliance (submitting all returns on time)

Late Payment Penalties

Tax unpaid after 15 days: a first penalty calculated at 2% of the outstanding amount
Tax unpaid after 30 days: a further 2% penalty on the amount still outstanding at day 30
Tax unpaid after 30 days: an additional daily penalty at an annualised rate of 4% until payment is made

Full details of the new penalty regime are set out in the MTD penalties and compliance guide.

Corporation Tax and MTD

HMRC has not announced a start date for Making Tax Digital for Corporation Tax. Barristers who operate through a limited company are not currently required to file quarterly updates under MTD for Corporation Tax. The existing Corporation Tax Self-Assessment regime continues to apply. If you are considering incorporation as a barrister, MTD for Corporation Tax is not a factor in that decision at present.

MTD for VAT

MTD for VAT has been in force since April 2022 for all VAT-registered businesses. If your barrister practice is VAT-registered, you should already be filing VAT returns through MTD-compatible software. If you are not yet compliant, you need to act immediately. Jack Ross provides a full VAT return service for barristers that ensures your filings are MTD-compliant.

Worked Example

Scenario: Sarah is a self-employed barrister in her eighth year of practice. In the 2025/26 tax year, her gross fee income is £120,000. She also receives £30,000 gross rental income from a buy-to-let property.

Step 1: Does MTD apply?

Sarah’s combined gross income is £150,000 (£120,000 fees + £30,000 rent). This exceeds the £50,000 threshold, so she falls within Phase 1 from April 2026.

Step 2: What happens in 2026/27?

Sarah must begin keeping digital records from 6 April 2026 using MTD-compatible software. Her quarterly updates are due as follows:

Quarter	Period	Deadline	Income to Report
Q1	6 Apr – 5 Jul 2026	7 Aug 2026	£30,000 fees + £7,500 rent
Q2	6 Jul – 5 Oct 2026	7 Nov 2026	£30,000 fees + £7,500 rent
Q3	6 Oct 2026 – 5 Jan 2027	7 Feb 2027	£30,000 fees + £7,500 rent
Q4	6 Jan – 5 Apr 2027	7 May 2027	£30,000 fees + £7,500 rent

Sarah also reports her allowable expenses each quarter. Her chambers rent is £30,000 per year (£7,500 per quarter), her practising certificate is £1,200, professional subscriptions total £600, and she claims £3,000 in travel expenses. Her property expenses are £8,000 per year.

Step 3: End of Period Statement and Final Declaration

By 31 January 2028, Sarah submits her End of Period Statement confirming the quarterly figures, then her Final Declaration. Her total self-employment profit is £85,200 (£120,000 fees less £34,800 allowable expenses). Her rental profit is £22,000 (£30,000 less £8,000 expenses). Her combined taxable income is £107,200, before personal allowance and any pension contributions.

What Should Barristers Do Now?

Check your gross income. Look at your total fees received (before any deductions) for 2024/25 or 2025/26. If the figure exceeds £50,000, you are in Phase 1.
Choose MTD-compatible software. Speak to your accountant about which software suits your practice. If you do not have a preference, Jack Ross will recommend and set up the right package as part of our Making Tax Digital service for barristers.
Start keeping digital records. Even if MTD does not technically apply until April 2026, beginning digital record-keeping now means fewer problems at go-live.
Review your expense categories. MTD requires expenses to be categorised. Make sure your record-keeping separates chambers rent, travel, professional subscriptions, and other deductible costs.
Talk to your accountant. If your accountant is not familiar with barristers’ specific MTD requirements, consider switching to a specialist. Jack Ross has been handling barrister tax affairs since 1948.

Read our comprehensive Barrister Tax Guide for further detail on allowable expenses, tax planning strategies, and how to structure your affairs efficiently.

Frequently Asked Questions

Do I need to file quarterly if I use an accountant?

Yes. MTD for ITSA applies regardless of whether you use an accountant. However, your accountant can file the quarterly updates on your behalf. At Jack Ross, we handle the entire process – you provide us with your records (or we access them through shared software), and we submit each quarterly update before the deadline.

Can I still use spreadsheets?

Only if they are connected to HMRC via MTD-compatible bridging software. A standalone Excel spreadsheet does not meet the digital record-keeping requirement. If you currently track your fees and expenses in a spreadsheet, we can help you transition to compliant software or set up a bridging solution.

What if my income drops below the threshold mid-year?

Once you are within MTD for ITSA for a tax year, you must complete all four quarterly updates for that year. If your income drops below the threshold in a subsequent tax year, you may apply to HMRC for exemption. However, you cannot opt out mid-year.

Does pupillage award income count towards the threshold?

Pupillage awards are generally treated as self-employment income for tax purposes. If your pupillage award plus any other self-employment or property income exceeds the relevant threshold, you will be within MTD. Most pupil barristers will be below the £50,000 threshold during pupillage, but those with significant property income should check. See our guide to pupillage awards and tax.

Is there MTD for Corporation Tax?

No. HMRC has not announced a start date for MTD for Corporation Tax. If you operate through a limited company, you are not currently required to file quarterly updates for Corporation Tax. The existing annual Corporation Tax return regime continues.

What penalties will I face if I miss a quarterly deadline?

Under the new points-based system, each late submission earns one penalty point. At 4 points, you receive a £200 fine, and every subsequent late submission also triggers £200. Points expire after 24 months of full compliance. During the 2026/27 soft-landing period, HMRC will not issue points for quarterly updates submitted within one month of the deadline.

Sources

Need help preparing for Making Tax Digital? Jack Ross Chartered Accountants has been advising barristers since 1948. We handle MTD setup, software configuration, and quarterly filings so you can focus on your practice.

Contact Jack Ross →

Jack Ross Chartered Accountants provides full MTD compliance support for barristers, from software setup to quarterly filing.

Making Tax Digital for Barristers: Complete Guide for April 2026