HMRC’s Making Tax Digital (MTD) initiative is expanding — and if you’re self-employed or receive income from property, it’s time to start preparing.
From April 2026, MTD for Income Tax Self Assessment (MTD for ITSA) will become mandatory for many individuals, requiring new digital processes and quarterly submissions. Here’s what it means for you, what’s changing, and how we can help you stay compliant.
Who Will Be Affected?
The MTD for ITSA rules apply based on your combined income from self-employment and/or property (including furnished holiday lets and overseas property letting). The rollout is happening in stages:
| Income Level | MTD Applies From |
| Over £50,000 | April 2026 |
| Between £30,000 and £50,000 | April 2027 |
| £20,000–£30,000 (Under Review) | Proposed April 2028 |
Note: Income from employment, pensions, dividends, and savings is not included in MTD calculations or quarterly reporting.
What Will Change?
1. Digital Record-Keeping
You must maintain digital records of all your income and expenses related to self-employment and property.
– This can be done using software like Xero, QuickBooks, or spreadsheets with bridging software.
– If you’re currently using manual records, these will need to be replaced with a digital system.
2. Quarterly Submissions
You’ll need to submit income and expense summaries to HMRC every quarter using MTD-compatible software.
– Deadlines: 5 August, 5 November, 5 February, and 5 May
– We offer three levels of support:
• Full service – We handle everything for you
• Review service – You manage records, we review and submit
• Submission only – You provide data, we submit on your behalf
3. Final Declaration
At year-end, we’ll submit your final declaration (just like your current tax return) to HMRC. This will include any other income not reported in the quarterly updates (e.g. dividends or employment).
Penalties for Late Submissions
HMRC is introducing a points-based penalty system:
– 1 point per missed deadline
– £200 fine after 4 points
– Points expire after 24 months if deadlines are met
What You Should Do Now
1. Check your income – Are you above the £50k threshold?
2. Review how you keep records – Are you still using manual methods?
3. Talk to us – We’ll help you understand your obligations and recommend the right software and support package for your needs.
How We Can Help
We’re here to make the transition as smooth as possible. Our team will:
– Confirm if you’re within scope for MTD for ITSA
– Recommend software or bridging tools
– Provide training or ongoing support
– Handle quarterly and final submissions for you
Important: MTD compliance will incur additional work and reporting – we’ll discuss fees based on your chosen level of involvement.
Need Help Navigating MTD?
Whether you’re unsure of your eligibility or need help setting up digital systems, we’re here to guide you every step of the way.
📞 Contact us today to discuss how MTD for ITSA affects you and what steps to take next.
