Making Tax Digital for Income Tax (MTD for ITSA) comes into effect from April 2026. If you’re self-employed or a landlord earning more than £50,000 a year, this will affect you directly from 2026.
Here’s a step-by-step guide to getting prepared:
1. Check if you’re in scope
- Self-employed income over £50,000
- Rental income over £50,000 (including jointly owned property, split by share)
- Directors: dividends and PAYE aren’t included, but if you also have rental/self-employed income above £50,000, you’ll need to comply.
2. Choose MTD-compliant software
Spreadsheets and manual records won’t meet HMRC requirements. You’ll need approved software such as Xero to maintain digital records and submit returns.
3. Set up your digital record-keeping
Start recording all income and expenses digitally now. The sooner you begin, the smoother the transition will be.
4. Prepare for quarterly submissions
Instead of one annual Self Assessment, you’ll be reporting four times a year, plus an end-of-period statement and final declaration.
5. Speak to your accountant
We’ll make sure your software is set up, records are accurate, and deadlines are met. Most importantly, we’ll use the more regular data to keep you on top of your tax position throughout the year.
Countdown: April 2026
That’s less than 7 months away. Starting now will save stress later.
Get in touch to find out how we can set you up for Making Tax Digital and keep everything running smoothly.