Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is an initiative by HM Revenue and Customs (HMRC) to modernise the UK tax system by requiring businesses, sole traders, and landlords to keep digital records of their business income and expenses and to submit tax updates using HMRC-compliant software. It replaces traditional paper record-keeping and single annual tax returns with a digital, real-time process to send summary updates to HMRC every three months.

When to Get Set Up

The rollout happens in stages based on gross income. It applies from April 2026 for those with an income over £50,000, from April 2027 for those over £30,000, and from April 2028 for those over £20,000.

Once you fall under the MTD for Income Tax rules, your tax schedule moves to ongoing, five part submissions:

• Quarter 1 Update: Covers 6 April to 5 July; due by 7 August.
• Quarter 2 Update: Covers 6 July to 5 October; due by 7 November.
• Quarter 3 Update: Covers 6 October to 5 January; due by 7 February.
• Quarter 4 Update: Covers 6 January to 5 April; due by 7 May.

The Final Declaration finalises accounting adjustments, will include non-business income (for instance dividends or savings interest), and replaces the ‘old Tax Return.’ As before, this is due by 31 January of the following calendar year; the payment date for tax due overall does not change and remains payable by 31 January.

Penalty Charges

Failure to comply may result in penalties or delays in filing with HMRC. It has been confirmed that HMRC will not apply penalty charges in the first three quarters, but it would be prudent to ensure set up is made correctly ahead of time.

How We Can Help

We are offering a dedicated MTD support service to include, reviewing current bookkeeping setup to ensure it meets MTD requirements, preparing and submitting quarterly returns directly to HMRC and ongoing technical support and advice throughout the year to keep you compliant.

Contact us today!