Making Tax Digital for Income Tax Self Assessment (‘MTD ITSA’)

 

MTD ITSA is an initiative by HMRC aimed at modernising the self assessment tax system – you may be aware that similar changes were made in the last few years to the VAT regime.

 

What’s this all about?

From April 2026, it is HMRC's intention to extend MTD to Self Assessment taxpayers. As a result, certain taxpayers will be required to keep digital records and submit quarterly updates via an MTD-compatible software.

 

Am I affected?

The MTD ITSA rules are to be applied as follows:

  • From April 2026: Self-employed individuals and landlords with an annual business or property income over £50,000 must comply.
  • From April 2027: Self-employed individuals and landlords with an annual business or property income over £30,000 must comply.
  • From April 2028: Self-employed individuals and landlords with an annual business or property income over £20,000 must comply.

At this stage, HMRC has not confirmed if or when MTD will extend to those earning below £20,000

 

What MTD means for you

There are a number of important changes to prepare for:

  • You will need to keep digital records of your income and expenses
  • In addition to submitting a self-assessment tax return per year, you’ll need to send quarterly updates to HMRC using MTD compliant software
  • A final declaration will be required at the end of the tax year to confirm your tax position.
     

How we can help you

We understand that the proposed changes may seem daunting, but we are here to make the transition as smooth as possible. Our team are on hand to give you a helping hand by:

  • Helping you to choose and set up MTD-compliant accounting software
  • Assisting you with keeping digital records
  • Managing your quarterly submissions to HMRC on your behalf
  • Providing ongoing advice to ensure you remain compliant and tax-efficient
     

If you have any questions about how these changes will impact you, if you’d like to start preparing early, or you simply wish to have a chat about MTD, please do not hesitate to give us a call on +44 (0) 28 9038 2646 or get in touch by emailing info@acaccounts.com