Making Tax Digital for Income Tax Self Assessment (MTD for ITSA)
What is MTD for ITSA?
It's HMRC's initiative to modernise the tax system, requiring digital record-keeping and quarterly updates.
It replaces the current annual Self Assessment tax return for those affected.
HMRC's aim is to reduce errors, improve efficiency, and make tax reporting simpler and more accurate.
Key Changes:
Digital Record Keeping
Digital records include keeping income, expenses and bank transactions related to the business/property).
This includes the use of MTD-compatible software like FreeAgent, Quickbooks, Xero, Sage, or bridging software for spreadsheets.
Quarterly Updates
Quarter 1 (6 April – 5 July): Due 7 August
Quarter 2 (6 July – 5 October): Due 7 November
Quarter 3 (6 October – 5 January): Due 7 February
Quarter 4 (6 January – 5 April): Due 7 May
End-of-Period Statement (EOPS) & Final Declaration
This reconciles the quarterly data, includes other income sources including dividends, interest, employment income, capital gains.
Deadline: 31 January following the end of the tax year.
Who is Affected and When?
These thresholds are based on gross income (before expenses) from self-employment and property added together.
From April 2026: Self-employed individuals and landlords with gross income over £50,000
From April 2027: Self-employed individuals and landlords with gross income over £30,000
From April 2028: Those with gross income over £20,000 (This has been announced, but legislation is expected to confirm this)
You may already have received a letter from HMRC if you are likely to be affected.
How Luke Jackson Can Help You with MTD for ITSA:
Software Guidance & Implementation:
Assisting with choosing the right MTD-compatible software (e.g., Xero, QuickBooks, FreeAgent, Sage).
Setting up the software and migrating existing data.
Providing training on how to use the software for digital record-keeping.
Ongoing Compliance & Support:
Managing and submitting quarterly updates on your behalf.
Preparing and submitting the End-of-Period Statement and Final Declaration.
Ensuring compliance with all MTD regulations and deadlines.
Advising on best practices for digital record-keeping.
Proactive tax planning based on real-time data.
Dealing with HMRC queries.
Don't let MTD for ITSA become a burden.
If you want to save some time, and peace of mind, contact me today for a free consultation.