The UK government’s Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) initiative is set to transform how self-employed individuals and landlords report their earnings to HMRC. If you fall into this category, it’s essential to understand what’s changing, who is affected, and what steps you need to take to stay compliant.

Who Will Be Affected and When?

MTD for ITSA will be rolled out in stages, impacting self-employed individuals and landlords based on their income levels:

• From April 2026: If your combined annual business and property income exceeds £50,000, you must comply with MTD for ITSA.
• From April 2027: If your combined annual business and property income is over £30,000, you will also need to comply.
• Further changes expected: Future plans may extend MTD obligations to those earning above £20,000, but the government has yet to confirm a timeline.

What Are the Key Requirements of MTD for ITSA?

If you fall within the income thresholds, you will need to:

1. Keep Digital Records: Maintain digital records of all business and property-related income and expenses.
2. Submit Quarterly Updates: Provide HMRC with quarterly summaries of your financial activity using MTD-compatible software.
3. Annual Final Declaration: Submit a final year-end declaration to confirm your total income and expenses, replacing the traditional Self-Assessment tax return.

What Should You Do Now?

To prepare for MTD for ITSA, here are some key steps to take:

• Check Your Income Levels: Determine if your income falls within the affected thresholds.
• Adopt MTD-Compatible Software: Choose and set up accounting software that is compliant with MTD requirements. We have a number of solutions available, including Xero subscriptions, to help make the transition as easy as possible.
• Stay Informed: Keep up to date with HMRC announcements regarding any changes to MTD regulations.
• Get in Touch with Us: We’re working with our clients to make the transition as easy as possible. Contact us today and take the stress out of MTD for ITSA.

Don’t Wait – Get Ready for MTD for ITSA Today

Thousands of self-employed individuals and landlords will be affected by these changes. By acting now, you can ensure a hassle-free transition to digital tax reporting and avoid last-minute stress.

Get in touch with us today to discuss how we can help you prepare and stay compliant with Making Tax Digital for Income Tax. Don’t wait – take control and get ahead before the deadlines arrive!

If you have any questions regarding Making Tax Digital for Income Tax, please contact us on the details below.

(E) enquiries@advaloremgroup.uk (T) 01908 219100 (W) advaloremgroup.uk