Updated on 09/09/25
If you’re self-employed, a landlord, or have any untaxed income, Making Tax Digital for Income Tax Self-Assessment (or MTD for ITSA) is a government initiative that will transform the way you report and pay your income tax.
But with the timeline and rules always changing, it can be difficult to know when or how to comply with this new way of doing taxes.
Thankfully, we’ve got you covered. Read on to learn what MTD for ITSA is, and what you need to know.
What Is MTD for ITSA?
Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) is an update to modernise the UK tax system. This means certain taxpayers will need to keep digital records and submit tax information to HMRC using approved software.
According to the government, MTD will help the UK become one of the world’s most digitally advanced tax administrations. MTD for VAT has already been in effect since April 2022 – and income tax is the next step on the road to digitalisation.
MTD for ITSA means more people will need to submit their income tax self-assessments digitally.
What Does MTD Involve?
When MTD for ITSA rules come into effect, you’ll no longer need to submit your self-assessment tax returns to HMRC once a year. Instead, you’ll use MTD-compatible cloud accounting software to:
- Keep digital records of your business income and expenses
- Send quarterly updates to HMRC every three months
- Finalise your business income using an end-of-period statement (EOPS) and a final declaration each year.
Self-assessment customers with more than one business will need to keep separate records for each income source.
If you’re feeling concerned about the changes that MTD will bring, we’re here to tell you that you should embrace digital accounting, not avoid it. For support preparing for MTD for ITSA, find out more about our Making Tax Digital services and contact us to get started.
Who Needs to Register for MTD?
If you’re self-employed or a landlord with an income above the MTD threshold, you’ll need to register. MTD for ITSA also includes partnerships and anyone with a combined income from multiple properties or businesses that reach the threshold.
There are, however, some exemptions for MTD, including age, disability or a lack of digital access.
While previously scheduled for April 2024, the Government recently delayed MTD for ITSA for a further two years to give taxpayers more time to get MTD-ready.
That means you won’t need to comply with the new rules until 2026 at the earliest – and a phased approach means they won’t apply to everyone at first, either.
If you’re self-employed or a landlord with income above the MTD threshold, you’ll need to comply with the new rules.
What Is the MTD Threshold for 2026?
The proposed timeline is as follows:
- April 2026 – sole traders and landlords with incomes over £50,000 will need to comply with MTD for ITSA
- April 2027 – sole traders and landlords with incomes between £30,000 and £50,000 will need to comply with MTD for ITSA.
At the moment, there is no revised date for when partnerships will need to comply with MTD for ITSA. Meanwhile, the government is conducting a review of how the initiative can accommodate the needs of smaller businesses in the future.
How to Prepare for Mtd for Itsa
Here are 3 things you can do to get MTD-ready ahead of 2026.
1. Use MTD-Compatible Software
The first step is signing up for software that works with MTD for ITSA. Adopting the technology early will make the transition to this new way of doing taxes smoother.
While there are a lot of great cloud accounting packages to choose from, your accountant can help you weigh up your options.
2. Keep Digital Records
Once you’re set up with your software, we recommend keeping digital records as soon as possible. That way, you’ll be a Making Tax Digital pro by the time the rules are mandated!
3. Sign Up for the Pilot
The MTD for ITSA pilot is currently paused for newcomers, but it may be worth signing up once it reopens. The more time you have to get used to the new process, the easier it will be to stay compliant.
Can My Accountant Do MTD for Me?
If you prefer, an accountant can handle your returns on your behalf. With professionals on the case, dealing with the upcoming changes to income tax self-assessment will be a breeze.
As experts, your accountant can set you up with cloud accounting technology that works for you, keep you updated about any changes, and offer general guidance on MTD for ITSA legislation.
Your accountant will be able to prepare you for MTD, setting you up with the technology you need and guiding you to fulfil the new requirements.
How We Can Help
We hope this guide has helped you understand what MTD for ITSA is, what it involves and what you need to do to comply. We also offer a detailed guide tailored to landlords – grab your PDF guide to MTD compliance here.
Want to know more? Learn how we can prepare you for MTD for ITSA , and get in touch with our friendly team when you’re ready to get started.
