An update on Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) … (MTD for ITSA)
The self-employed and landlords
The mandatory use of MTD for ITSA compatible software is being phased in by H M Revenue & Customs for certain self-employed individuals and landlords. This represents a significant change to taxpayers for how self-employment and property income is reported.
The first phase (from April 2026) will require self-employed individuals and landlords with an income of more than £50,000 to keep digital records and provide quarterly updates on their income and expenditure to HMRC.
The second phase (from April 2027) will see those with an income of between £30,000 and £50,000 brought under the MTD for ITSA system.
The Government has also announced a review into the needs of smaller businesses, and particularly those under the £30,000 income threshold. The review will consider how MTD for ITSA can be shaped to meet the needs of these smaller businesses and the best way for them to fulfil their Income Tax obligations. It will also inform the approach for any further roll out of MTD for ITSA after April 2027.
We will continue to keep you informed in relation to MTD for ITSA, to ensure compliance with these digital tax requirements.
If you need further assistance, please contact a member of our Cloud Accounting & Tax Team.
