Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) is a major change in the way self-employed individuals and landlords in the UK manage and report their taxes. It’s part of the government’s initiative to modernise the tax system, making it more efficient and less error-prone.
If you’re self-employed, this change will likely affect how you record your income and submit your tax returns. Let’s explore what MTD ITSA is, how it will impact you, and what steps you need to take to ensure compliance.
What Is MTD ITSA?
MTD ITSA stands for Making Tax Digital for Income Tax Self-Assessment. It’s an extension of the government’s Making Tax Digital (MTD) initiative, which already applies to VAT. MTD ITSA focuses on streamlining the process of reporting income tax for:
- Self-employed individuals.
- Landlords with annual rental income.
Under MTD ITSA, you’ll need to:
- Keep digital records of your income and expenses.
- Submit quarterly updates to HMRC through MTD-compatible software.
- File an End of Period Statement (EOPS) and a Final Declaration to confirm your annual income and tax obligations.
Who Does MTD ITSA Apply To?
MTD ITSA will apply to:
- Self-employed individuals and landlords with an annual business or property income exceeding £50,000starting from April 2026.
- Those with income between £30,000 and £50,000starting from April 2027.
HMRC is still consulting on how MTD ITSA will apply to individuals earning below £30,000 annually, but it’s important to stay informed about future changes.
How Will MTD ITSA Affect You?
1. Digital Record-Keeping
If you’re used to keeping paper records or spreadsheets, you’ll need to switch to MTD-compatible software to maintain your records digitally.
2. Quarterly Reporting
Instead of filing a single Self-Assessment tax return once a year, you’ll submit four quarterly updates to HMRC. These updates provide a snapshot of your income and expenses throughout the year.
3. End of Year Submissions
You’ll still need to finalize your accounts at the end of the year, but the process will be streamlined through digital tools.
4. Increased Transparency
With regular updates, you’ll have a clearer picture of your tax obligations throughout the year, reducing the risk of surprises at year-end.
What Do You Need to Do to Prepare for MTD ITSA?
1. Determine If MTD ITSA Applies to You
Check your annual income from self-employment or property to see when you’ll need to comply with MTD ITSA.
2. Choose MTD-Compatible Software
Popular options like QuickBooks, Xero, and FreeAgent are all MTD-compatible. These tools will help you maintain digital records and submit quarterly updates seamlessly.
3. Organize Your Records
Ensure your income and expense records are accurate and up to date. If you’ve been relying on paper receipts, it’s time to transition to a digital system.
4. Learn the New Process
Familiarize yourself with how to submit quarterly updates, End of Period Statements, and the Final Declaration.
5. Seek Professional Advice
Navigating MTD ITSA can be complex, especially if you’re new to digital accounting. A trusted accountant can guide you through the transition and ensure compliance.
How Guida Accountancy Can Help
At Guida Accountancy, we understand the challenges that MTD ITSA presents for self-employed individuals and landlords. Our goal is to make the transition as smooth and stress-free as possible.
Here’s how we can support you:
1. Expert Guidance
We’ll help you understand how MTD ITSA affects your specific situation and create a plan to ensure compliance.
2. Software Setup and Training
Choosing and setting up MTD-compatible software can be overwhelming. We’ll recommend the best option for your needs, handle the setup, and provide training to get you up to speed.
3. Quarterly Reporting Support
We’ll assist with preparing and submitting your quarterly updates to HMRC, ensuring accuracy and timeliness.
4. Year-End Submissions
From the End of Period Statement to the Final Declaration, we’ll manage your year-end submissions so you can focus on running your business.
5. Ongoing Support
We’re here to answer your questions, troubleshoot issues, and provide peace of mind as you navigate MTD ITSA.
Get Ready for MTD ITSA with Guida Accountancy
Making Tax Digital for Income Tax Self-Assessment is a significant change, but you don’t have to face it alone. At Guida Accountancy, we’re experts in helping self-employed individuals and landlords transition to MTD seamlessly.

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