The UK tax system is going digital — and if you’re self-employed or a landlord, these changes could affect how you report your income.

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is the next step in HMRC’s plan to simplify tax reporting and improve accuracy through digital record-keeping.

Here’s everything you need to know, what it means for you, and how to get prepared.

💡 What Is MTD ITSA?

MTD ITSA stands for Making Tax Digital for Income Tax Self Assessment.

It’s part of HMRC’s wider Making Tax Digital initiative, which aims to make tax administration more efficient, effective, and easier for taxpayers.

Under MTD ITSA, individuals who are self-employed or receive income from property will need to:

• Keep digital records of their business income and expenses, and
• Send quarterly updates to HMRC using MTD-compatible software, rather than filing one annual Self Assessment tax return.

📅 When Will MTD ITSA Start?

HMRC has announced a phased rollout:

• April 2026: Applies to self-employed individuals and landlords with a combined annual income over £50,000.
• April 2027: Extends to those earning between £30,000 and £50,000.
• Those earning below £30,000 are not yet required to join, though this may change in future phases.

Partnerships and limited companies will join MTD at a later date (no confirmed timeline yet).

🔄 How Will It Work?

Here’s how MTD ITSA changes the way you report your income:

Current Self Assessment,

One tax return submitted once a year

Paper or spreadsheet records allowed

Manual calculations and entries

Limited visibility during the year

New MTD ITSA,

you’ll send four quarterly updates to HMRC each year.

Four quarterly updates plus a final declaration

Digital record-keeping required

Automatic updates through MTD software

Real-time view of your tax position

Under MTD ITSA, you’ll send four quarterly updates to HMRC each year. These will summarise your business income and expenses for that period.

At the end of the tax year, you’ll then submit a Final Declaration to confirm your income and claim any adjustments, reliefs, or allowances.

🧾 What You’ll Need

To comply with MTD ITSA, you’ll need:

1. MTD-compatible software
   (We use Xero and Vital Tax)
2. Digital record-keeping — you must record all income and expenses digitally.
3. A Government Gateway account linked to your software.
4. Quarterly submissions and a final declaration each year.

💼 How We Can Help

While MTD ITSA aims to make tax simpler, it also means a big shift for many sole traders and landlords.
We can make the process far smoother by:

• Setting up and maintaining your MTD-compliant software
• Managing your quarterly submissions to HMRC
• Ensuring your records are accurate and compliant
• Offering ongoing support and advice throughout the year

By moving to our monthly accounting package, you can stay compliant, up-to-date, and ready for MTD — without the last-minute stress.

⚙️ Why Preparing Early Matters

Even though MTD ITSA doesn’t start until April 2026, getting ready now makes sense.
You’ll have time to:

• Choose and learn your software
• Get used to digital record-keeping
• Smoothly transition without pressure

Businesses that prepare early often find their finances become more organised and easier to manage.

🚀 Final Thoughts

MTD ITSA is coming — and it’s here to stay.

By embracing digital tools and working with an accountant who understands the system, you can turn compliance into an opportunity:
➡️ Better financial visibility,
➡️ Fewer surprises at tax time, and
➡️ A more efficient, modern way to manage your business finances.



If you’re unsure how MTD ITSA will affect you, or you want help getting set up early, our team is here to guide you every step of the way.

📩 Get in touch today to learn how our MTD-ready monthly packages can help keep your business compliant and stress-free.