Get ready for Making Tax Digital for ITSA – Key changes ahead

The April 2026 rollout of Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) is fast approaching.  

This initiative requires individuals and businesses to keep digital records and use approved software to file tax returns. 

A brief history of MTD 

MTD was introduced in stages, starting with VAT: 

• April 2019 – Businesses with taxable turnover above the VAT threshold had to adopt MTD for VAT. 

• April 2022 – All VAT-registered businesses, regardless of turnover, were included. 

Upcoming ITSA requirements 

The phased introduction of MTD for ITSA is as follows: 

• April 2026 – Self-employed individuals and landlords with an annual income above £50,000 must comply. 

• April 2027 – The threshold will lower to include those earning over £30,000. 

Eventually, people earning over £20,000 will also be required to follow MTD rules, though the timeline for this stage is yet to be confirmed. 

In the October 2024 Budget, the Government reaffirmed its focus on modernising the tax system through MTD, emphasising its long-term benefits. 

How to prepare 

To ensure your business is ready for these changes: 

• Review your processes – Assess how your current systems align with MTD requirements. 

• Choose suitable software – HM Revenue & Customs (HMRC) provides approved solutions to simplify compliance. 

• Train your team – Equip staff with the skills to manage digital systems effectively. 

• Stay informed – Keep track of HMRC updates and deadlines to ensure full compliance. 

Our expert team is here to guide you through the transition, offering tailored support and practical advice. 

Contact us today to make sure your business is fully prepared for MTD for ITSA.