Making Tax Digital for Income Tax: What You Need to Know

Making Tax Digital (MTD) is transforming the way individuals and businesses manage their tax affairs. While many VAT-registered businesses are already familiar with the MTD process, the next phase – MTD for Income Tax Self-Assessment (ITSA) – is fast approaching, and it’s important to be prepared.

Who does MTD for ITSA affect?

From April 2026, self-employed individuals and landlords with a total annual income over £50,000 will need to keep digital records and submit quarterly updates to HMRC using MTD-compatible software. Those earning between £30,000 and £50,000 will follow in April 2027. The government has confirmed that MTD will not be extended to those earning under £30,000 until a review has been carried out.

The aim of MTD is to make tax reporting more efficient and accurate, helping to reduce errors and improve compliance. For many, it represents a significant change in how they manage their tax obligations – particularly for those still using spreadsheets or paper records.

How to prepare for MTD for ITSA

Getting ready now can ease the transition. This means reviewing your current record-keeping practices, exploring compliant software options, and speaking to your accountant for advice. The right support can make all the difference, helping you stay compliant while saving time and effort.

At Simpkins Edwards, we’re here to help you navigate the changes. Whether you’re a landlord with a growing property portfolio or a sole trader managing your accounts alongside your business, we can guide you through the process and ensure you’re MTD-ready.

To find out how we can support you, speak to a member of our team today.