Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) also known as Making Tax Digital for Tax Returns
This new initiative requires self-employed individuals and landlords to use MTD compatible software for regular tax reporting as opposed to once a year reporting. This means instead of one annual tax return, you must submit summary updates of your income and expenses to HMRC every three months. Following this, a year-end submission is still required to finalize your tax position, which replaces the traditional Self Assessment return.
This new initiative will begin from April 2026, firstly, for those who had a total gross income (total amount of money earned before any taxes, deductions, or expenses are taken out) of over £50,000 in the 2024-2025 tax year.
If your total grosss income was over £50,000 in the 2024-2025 tax year, you must be signed up and have MTD-compatible software in place before 6 April 2026.
For more information on when you may be required to join, please view our ‘Who is Affected and When are you required to join MTD for ITSA’ section which is found further below on this page.
Digital records
You will be required to keep records digitally. This means you must electronically record and store your business income and expenses using MTD (Making Tax Digital) compatible software.
MTD for ITSA compatible software refers to an accounting software package or a set of combined digital tools (including bridging software for spreadsheets) that meets HMRC’s technical standards for keeping digital records and submitting information directly to their systems.
Bridging software is a digital tool that provides a “digital link” between existing, non-MTD compatible record-keeping systems (such as spreadsheets) and HMRC’s systems.
What is a digital link?
A digital link connects data from spreadsheets or older software to HMRC's platform, preventing the need for manual copying and pasting of figures, which is not allowed under MTD rules.
Important to note: You do not need to keep digital records for other sources of income, such employment (PAYE), a partnership, savings interest, or dividends. These are reported at the end of the year via the final declaration.
Quarterly Updates and Final Declaration
Instead of a single annual tax return, MTD for ITSA will require more frequent reporting obligations. The reporting will now be Quarterly Updates. These quarterly updates will be summaries of income and expenses sent to HMRC every three months directly from the MTD compatible software.
The deadlines for submitting quarterly updates will be the same for everyone who has to follow the MTD for ITSA rules.
Table of Periods and Deadlines
From the start of the tax year on 6th April, the periods and deadlines in the table below will apply.
| Period Covered | Filing Deadline |
|---|---|
| 6 April to 5 July | 7 August |
| 6 July to 5 October | 7 November |
| 6 October to 5 January | 7 February |
| 6 January to 5 April | 7 May |
End-of-Year Finalisation: At the end of the tax year, a final declaration must be submitted through the MTD compatible software to account for any other income sources, allowances, and reliefs, replacing the traditional Self-Assessment tax return process. This process lets you confirm that the updates you’ve sent are correct, add any details about personal income or reliefs or make any other necessary adjustments.
It is important to note that the submission deadline and final tax bill payment deadline remains 31 January after the tax year ends (along with any first payment on account for the next year).
Who is Affected and When are you required to join MTD for ITSA
Mandatory declaration is being introduced based on an individual's total qualifying income which is gross income (total earnings before any deductions) from self-employment and property combined.
Taxpayers with income below these thresholds can continue using the standard Self-Assessment system or sign up for MTD voluntarily.
Exemptions are available for individuals who are digitally excluded due to age, disability, or location, or other specific circumstances.
We are here to help you with all requirements in MTD for ITSA. Please view our tailored packages found below or simply call us for an initial free consultation - 0208 050 7587
Get StartedTailored packages designed around your needs.
Basic Package (Preparation & Submission of 4 Quarterly updates)
- Free Registrationg
- Digital Record Keeping
- Preparation & Submission of 4 Quarterly updatest
- Preparation & Submission of Final Declaration
Standard Package (Preparation and Submission support)
- Free Registration
- Digital Record Keeping
- Preparation and Submission of 4 quarterly updates
- Preparation & Submission of Final Declaration
- A call with tax consultant prior to each submission
Premier Package (Full Support)
- Free Registration
- Digital Record-Keeping
- Preparation and Submission of 4 quarterly updates
- Preparation & Submission of Final Declaration
- All year round support