Making Tax Digital for Income Tax

Did you know there are big changes coming to the tax return process?

Landlords and sole traders with business or property income over £30,000 are going to be affected by all of this, so read on if this is you.

Making Tax Digital for Income Tax Self Assessment, or MTD for ITSA for short, means you will have to report your transactions and income to HMRC:

🎈 using digital records
🎈 every 3 months throughout the year
🎈 and a final submission at the end of the tax year

This means you will have new deadlines to manage, on top of the current 31 January final deadline.

Every 3 months after the start of a new tax year, you will have to submit an update to HMRC within one month. For example, the first 3 months from 6 April to 5 July will be due by 5 August. This is a huge change for sole traders who are used to submitting their tax returns as close to the January deadline as possible, as the time you have to prepare for your submissions is much, much less.

The easiest way to get ready for all of this is to explore HMRC recognised "MTD" software.

Using software can be an opportunity! It makes your bookkeeping process faster, provides you with cloud stored records (no more locally saved files!) and can change how you approach your business numbers entirely. Imagine proactively reviewing your figures and even having an accountant to discuss them with, for example?

From April 2026, landlords and business owners with over £50k of qualifying income will have to enter this new process. The following year, in April 2027, those over the £30k are captured.

You want to be 'settled' into any software you use well before these dates and accountants are best placed to help you get ready. 👋👋