Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) will be introduced
in two phases:
-From April 2026, for those with an annual business or property income of
more than £50,000.
-From April 2027, for those with an annual business or property income of
more than £30,000.
This phased approach aims to give self-employed individuals and landlords more
time to prepare for the transition to digital tax reporting. If you have any additional
questions or require further details, then feel free to contact ourselves.
Making Tax Digital for Income Tax (MTD for IT) Is the next stage of modernisation for the UK tax system. Self-employed people will soon need to become compliant with MTD for IT rules and start filing income tax returns digitally.
Who will affected by MTD for IT?
Under MTD for IT rules, self-employed people and landlords must use MTD-compatible software to keep digital records and send updates to HMRC.
The current Self Assessment system will remain in place for those who don’t have to join in MTD, but self-employed people and landlords can join MTD for IT voluntarily.
Signing up early is a good way to familiarise yourself with MTD software, and embrace digital transformation.
What do you need to Submit for MTD for IT
MTD for IT compliance will mean that self-employed people and landlords will need to:
- Submit four quarterly updates and Final Declaration: Each quarterly update must contain details of the taxpayer’s income and expenditure, with the final declaration containing their finalised end-of-year position for tax.
- Use MTD-Compatible software: Managing and tracking digital records, and sending submissions to HMRC needs to be done with MTD-compatible software. Getting your team and clients confident with this software is a must.
The payment deadline for final declaration is 31st January; the same as the Self Assessment date.