Making Tax Digital for Income Tax Self Assessment (MTD ITSA): Are You Ready?
Tax reporting is evolving, and if you're a self-employed individual or a landlord, these changes will affect you. Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is set to transform how income tax is recorded and submitted to HMRC. But what exactly does this mean, and how can you prepare?
Who Does MTD ITSA Affect?
MTD ITSA applies to:
- Self-employed individuals and landlords with annual business or property income exceeding £50,000 (from April 2026, with a threshold reduction to £30,000 in 2027).
- Those who currently submit a Self Assessment tax return for income tax purposes.
If you fall into these categories, it's essential to start preparing for the upcoming changes.
When Do These Changes Take Effect?
- April 2026 – MTD ITSA applies to those earning £50,000 or more from self-employment or property.
- April 2027 – The threshold drops to £30,000, bringing more taxpayers into the system.
HMRC has extended the timeline to allow businesses and landlords ample time to transition smoothly.
What You Need to Do
- Use MTD-Compliant Software – Instead of submitting annual tax returns, MTD ITSA requires digital record-keeping and quarterly updates via approved software.
- Maintain Digital Records – Your income and expenses must be logged electronically.
- Prepare Early – Waiting until the last minute may lead to confusion. Start familiarising yourself with MTD-compliant software now.
How We Can Help
At Harris Bookkeeping & Accountancy Services, we’re here to make your transition to MTD ITSA effortless. We offer:
- Guidance on selecting and using MTD-compliant software like Xero.
- Support with digital record-keeping, ensuring compliance.
- Quarterly review services to ensure accurate submissions.
- Ongoing tax advice tailored to your business or rental income.
Making Tax Digital doesn’t have to be stressful. With the right preparation and expert support, you can meet the new requirements smoothly.
Want to get ahead of the changes? Book a call with us today and let’s get you MTD ITSA-ready!
