Making Tax Digital for Income Tax Self Assessment (also known as MTD ITSA) is HMRC's initiative to modernize the tax system. We’re here to guide you through the transition with precision, professionalism and real support.

What is MTD for ITSA?

In simple terms, it means that instead of the traditional yearly tax return, you’ll keep track of your records digitally and send tax updates to HMRC throughout the year. Under MTD ITSA, you will:

·        Replace manual records with digital record keeping

·        Send quarterly updates to HMRC on your income and expenses

·        Submit a final declaration at the end of the tax year to confirm the details are accurate

This isn’t just more admin. It’s a shift towards a smarter, more accurate tax system, and we’ll make sure you’re ready.

Who does it affect – and when?

HMRC is phasing MTD ITSA in gradually:

From 6 April 2026: If your gross self-employment and/or rental income is over £50,000, you’ll need to join the scheme.

From 6 April 2027: If your gross income is between £30,000 and £50,000, you’ll be required to join from this date.

Under £30,000? Don’t worry, you won’t be required to join just yet. HMRC plans to expand MTD in the future.

i. Gross income means total takings before expenses.

What will you need to do?

If you fall within the scope of MTD, here’s how things will change when the relevant date arrives:

1.      Register for Making Tax Digital.

HMRC will notify you after reviewing your 2025 Tax Return if you are required to join MTD. You can sign up through the HMRC online service and as your agents, we can complete this with HMRC on your behalf.

2.       Use digital accounting software

You’ll need HMRC-approved software (like Xero or QuickBooks) to record your business income and costs and send updates directly to HMRC. Paper records or manual spreadsheets won’t be enough.

3.       Submit quarterly updates to HMRC

Every three months, you’ll send a short summary of income and expenses to HMRC - like mini tax returns. These updates won’t involve payments, but they do help HMRC keep a clearer picture of your earnings.

4.       Complete a year-end declaration

At the end of the tax year, you’ll submit a final statement (known as the End of Period Statement plus Final Declaration) confirming your total income, applying any adjustments and finalising your tax position. This final step replaces the traditional Self Assessment return.

Note: You’ll still pay your tax bill at the usual deadlines (for example, 31 January) even though reporting happens throughout the year.‍

How we can help you transition.

This is a big change – but it’s one we’re prepared for. As your accountants, we will support you at each step to make moving to MTD as easy as possible. Here’s how we can help:

Choosing the right software:

We’ll help you choose accounting software that’s compatible with HMRC and suited to yourbusiness. If you’re not sure where to start, we’ll guide you so you’re confident using it.

Digital record keeping made easy:

We can support you with day-to-day bookkeeping, help migrate your existing records, or simply provide training so you feel confident managing things yourself.

Quarterly Filing Support:

We can keep you on track with reminders, support, and optional filing services toreview and submit quarterly updates on your behalf - so you’re never scramblingbefore a deadline.

Ongoing Advice:

Have questions along the way? You can always call or email us for friendly, jargon free support. We’ll break down the tech talk and tax rules into plain English, to make sure you stay compliant and stress-free.

Let’s get ready together.

We’re here to make the transition to MTD ITSA smooth, stress-free, and successful. Whether you want to start planning now or just have a few questions, we’d love to hear from you. Click here to contact us.