Making Tax Digital for Income Tax

Starting from 6 April 2026, the UK government will implement Making Tax

Digital for Income Tax Self-Assessment (MTD for ITSA), introducing

significant changes to how self-employed individuals and landlords (not Limited

companies) report their income.

Who Will Be Affected and When:

• From 6 April 2026: Self-employed individuals and landlords with an

annual business or property income exceeding £50,000 will be required to

comply with MTD for ITSA.

• From 6 April 2027: The threshold lowers to include those with an annual

income over £30,000.

• Future Plans: The government intends to extend MTD for ITSA to

individuals with income over £20,000 by the end of this Parliament, with

specific timelines to be announced later.

Key Requirements:

1. Digital Record-Keeping: Maintain digital records of all business income

and expenses using compatible software.

2. Quarterly Updates: Submit summaries of income and expenses to HM

Revenue & Customs (HMRC) every quarter through the digital platform.

3. End-of-Period Statement: After the tax year concludes, provide a final

declaration to confirm and adjust the submitted information, similar to the

current Self-Assessment tax return process.

Preparation Steps:

• Assess Income Levels: Determine if your annual business or property

income exceeds the specified thresholds to understand when you will need

to comply.

• Adopt Compatible Software: Choose and familiarize yourself with

MTD-compatible accounting software to ensure seamless digital record-

keeping and submissions.

• Stay Informed: Keep abreast of updates from HMRC regarding MTD for

ITSA to ensure timely compliance and to understand any further changes.

By proactively preparing for these changes, you can ensure a smooth transition

to the new digital tax reporting system.

Contact Andrew if you have any questions regarding the above.

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