Pictured above: James Rose MMath(Hons) FCA CTA
Making Tax Digital for Income Tax (MTD for ITSA) came into effect on 6 April 2026. Does this affect you and if so, are you ready? It is a major change in how self-employed individuals and landlords report their income and manage their tax affairs, so action needs to be taken now, if you haven’t already done so.
What is MTD for ITSA?
Making Tax Digital (MTD) is HMRC’s initiative to digitise the UK tax system. MTD for ITSA will require individuals with income from self-employment or property above certain thresholds to keep digital records and report income via MTD-compatible software.
A phased rollout is planned, based on gross income (not profit):
| Start Date | Income Threshold |
| April 2026 | Over £50,000 in the 2024/25 tax year |
| April 2027 | Over £30,000 in the 2025/26 tax year |
| April 2028 | Over £20,000 in the 2026/27 tax year |
Note: Those under £20,000 and all Partnerships are currently excluded. However, individual partners may need to comply if they also have their own business or property income.
You must combine gross income from all relevant sources to determine if you meet the threshold. For example, £15,000 rental income + £40,000 self-employment turnover = £55,000, so MTD for ITSA applies.
The income threshold test is initially based on the figures submitted to HMRC for the 2024/25 tax year. Exemptions may be available for reasons such as age, disability, or religious beliefs.
HMRC are not auto-enrolling those who meet the requirements for MTD; you are responsible for completing the registration yourself.
What Will Change?
If you meet the thresholds, you will no longer file one annual Self Assessment return. Instead, you must:
- Keep digital records using MTD-compliant software (which can include spreadsheets and ‘bridging software’).
- Submit quarterly updates to HMRC for each business/income type.
- Submit a Final Declaration confirming total income, such as salary, pension, interest, dividends and any accounting or tax adjustments to the quarterly figures (akin to the current Self Assessment Tax Return).
For each transaction, the digital records must capture the date, amount and Tax Category (broadly the same as those categories currently shown on a Self-Assessment Tax Return).
The deadlines for making the quarterly and year-end submissions are as follows:
| Quarter/Report | Period End (*) | Deadline |
| Q1 | 5 July (or 30 June) | 7 August |
| Q2 | 5 October (30 September) | 7 November |
| Q3 | 5 January (31 December) | 7 February |
| Q4 | 5 April (31 March) | 7 May |
| Final Declaration | 31 January following the tax year end | |
(*) An election can be made to align with calendar quarters.
Please note the MTD filing deadlines do not affect the payment of any tax liability. Payment deadlines remain 31st January and 31st July.
What action do I need to take?
If you haven’t already done so, you should consider the following:
- Review your current record-keeping processes.
- Explore suitable MTD-compatible software.
- Consider bridging software if using spreadsheets.
- Familiarise yourself with the new filing deadlines and reporting obligations. The first quarterly submission will be due by 7 August 2026.
- Complete the sign-up process.
Speak to your accountant or bookkeeper, if you have one, to decide on the best course of action for you. If you need any support in preparing for MTD, please contact us to discuss your specific requirements.
The above is for general guidance only and no action should be taken without obtaining specific advice.
Pearson May Chartered Accountants & Chartered Tax Advisers
Bath, Trowbridge and Chippenham
If you are looking to trim your tax, it pays to get professional advice.
At Pearson May we specialise in a full range of accountancy services to help you maximise your profits and minimise the tax you have to pay.
Call Bath 01225 460491
or visit pearsonmay.co.uk
