I am adding updates here on developments in the move towards the long-delayed Making Tax Digital for Income Tax Self Assessment (MTD ITSA)
2025/26
By the end of March 2026, if you have self-employed and/or rental income, you will need to know the total of your self-employed/rental income for the 24/25 tax year to check whether you must submit the five income-tax returns of information required by HMRC in 25/26 under MTD ITSA. This will need real-time recording of income, or some very speedy sums just at the end of the tax year.
HMRC has written to some taxpayers already where they think based on recent profits they will need to enter MTD in a year’s time. But it is up to each taxpayer to check whether this is needed.
You can check here how MTD is likely to affect you from 2026 – but remember this will be based on your 25/26 figures
If you are VAT registered, MTD ITSA runs in addition to the current MTD VAT. That’s nine submissions to HMRC in a year.
Partnerships are not yet required to be within MTD ITSA. But income from jointly-owned properties will need to be included.
2026
Four quarterly updates of information to HMRC and a final tax return
These are due to begin from April 2026.
The first quarter will run from 5 April to 5 July, or by election, from 1 April to 30 June (I shall be encouraging clients to choose the slightly earlier dates). The first quarterly update covering April, May and June will be due to reach HMRC by 7 August.
Most taxpayers who are in business or who are landlords, will need to be keeping digital records (spreadsheet/app/other software). with quarterly updates going to HMRC and then a final submission which draws together all the information for the whole tax year.
From April 2026, MTD ITSA will be mandated for self-employed businesses and landlords with turnover (income before deducting any expenses) above £50,000.
From: April 2027, MTD ITSA will be mandated for self-employed businesses and landlords with business turnover above £30,000.
From April 2028, MTD ITSA will apply to businesses with turnover above £20,000.
More details to follow in due course. Many representations have been made to HMRC in recent years to say that systems, plans, and staff have not been in place to make the move to MTD for ITSA – a factor in the delays to date in bringing this in.