If you are self-employed or a landlord, you have probably heard of Making Tax Digital (MTD).
The upcoming MTD changes to Income Tax Self Assessment (ITSA) will affect how and when you report your income.
Here is a quick rundown of what is coming and how to get ready.
What is MTD for ITSA?
MTD for ITSA is part of the Government’s push to fully digitise the tax reporting process for anyone with self-employment or property income.
Instead of filing a single annual tax return, you will be submitting income and expenses every quarter through HMRC-approved software.
Key dates – When will you need to comply?
- April 2026 – If your gross income from self-employment or property exceeds £50,000 (based on your 2024/25 tax return).
- April 2027 – If your combined income from these sources exceeds £30,000 (based on your 2025/26 tax return).
If your income is below £30,000, you won’t be required to join MTD for ITSA, but there are some exemptions for those who can’t meet the digital requirements.
How do you know if you are affected?
HM Revenue & Customs (HMRC) has released a helpful tool to check if you need to comply with MTD for ITSA.
It will ask a series of questions and let you know when (or if) you will need to start reporting digitally.
Be aware, though, that the tool is not perfect. It does not handle foreign property income well and may mistakenly assume all company directors are within Self Assessment.
What counts towards your qualifying income?
Qualifying income is the total amount you earn from self-employment and/or property in a tax year.
This figure will decide if you meet the thresholds for mandatory MTD reporting.
Are there any exemptions?
Yes, some people are exempt from MTD for ITSA, including those without a National Insurance number, trustees, and personal representatives.
Additionally, you can apply for exemption if you are digitally excluded.
If you’re not required to join just yet, you can also voluntarily sign up early to get a head start.
Getting Ready for MTD for ITSA
Here’s what you should do to prepare:
- Check your income – Know your qualifying income for the relevant tax years to understand when or if you’ll need to comply.
- Think about voluntary sign-up – If you are not yet required to join, consider signing up early to get familiar with the system.
- Use the right software – You will need MTD-compatible software to submit your returns. We can help guide you in choosing and setting up the best software for your needs.
MTD for ITSA is coming, and it is important to be prepared.
If need advice on how to get ready, contact our team. We are here to help make the transition as smooth as possible.