What you need to know
The upcoming expansion of Making Tax Digital for Income Tax Self Assessment (ITSA) will affect many self-employed individuals and landlords, and we want to ensure you are well-prepared for these changes.
What is Making Tax Digital for ITSA?
Making Tax Digital is HMRC's initiative to modernise the tax system. For ITSA, it means that instead of submitting an annual tax return, qualifying individuals will need to:
- Keep digital records of their income and expenditure.
- Send quarterly updates of their income and expenses to HMRC through MTD-compatible software.
- Finalise their income tax position with an end-of-period statement.
When is it coming in?
Making Tax Digital for ITSA is currently scheduled to be introduced for businesses and landlords with an income of over £50,000 from 6 April 2026. Those with an income of over £30,000 will follow from 6 April 2027.
Who will be affected?
This will primarily affect:
- Self-employed individuals
- Landlords with rental income
How can we help you prepare?
We understand that new regulations can sometimes feel daunting, but please be assured that we are here to guide you through every step of this transition. Our services can help you with:
- Understanding your obligations: We will assess how MTD for ITSA will specifically impact your business or rental property.
- Submitting your quarterly updates: We can manage your quarterly submissions to HMRC on your behalf.
- Year-end finalisation: We will continue to prepare and submit your end-of-period statements and finalise your tax position.
What You Should Do Next
We are currently reviewing software options to best support our clients. We'll be in touch with those who need to start submitting quarterly returns from 6 April 2026 to discuss the specific steps you'll need to take.
In the meantime, if you have any immediate questions or wish to discuss how MTD for ITSA might affect you, please don't hesitate to contact us.
We look forward to helping you navigate these changes smoothly.
For more information get in touch with our Tax Team on tax@richardsonswift.co.uk, or call on 01225 325580.