Below we have answered the most frequent questions we receive about Making Tax Digital for Income Tax Self-Assessment; however, if you have any other questions or need support setting up MTD for ITSA, please get in touch.

Who Needs to Comply and When?

MTD for ITSA is being rolled out in phases based on your qualifying income (gross income from self-employment and property, before expenses).

• From 6 April 2026: If your qualifying income was over £50,000 in the 2024/2025 tax year.
• From 6 April 2027: If your qualifying income was over £30,000 in the 2025/2026 tax year.
• From April 2028: HMRC plans to extend this to those with qualifying income over £20,000.

Even if you don’t meet the current thresholds, it’s wise to start preparing as the thresholds are set to decrease.

What Does MTD for ITSA Mean for You?

The core changes under MTD for ITSA are:

1. Digital Record Keeping: You will no longer be able to rely solely on paper records or basic spreadsheets. You must keep digital records of your income and expenses using HMRC-compatible software.
2. Quarterly Updates: Instead of one annual Self Assessment Tax Return, you will need to submit summary updates of your income and expenses to HMRC every three months.
   • For a tax year running 6^th April to 5^th April, the deadlines are typically:
     • 7 August (for April to July)
     • 7 November (for July to October)
     • 7 February (for October to January)
     • 7 May (for January to April)
3.  Final Declaration: After your final quarterly update, you’ll submit a Final Declaration (similar to your current Self Assessment tax return) that includes all other taxable income (e.g., employment income, dividends). This final declaration is due by 31 January following the tax year.

MTD for ITSA changes how you report, not when you pay your tax. Your tax payment deadlines will remain the same (31 January).

Why You Need a Professional Bookkeeper to Get MTD Ready

While the idea of digital record-keeping might seem straightforward, navigating the complexities of MTD for ITSA can be challenging. This is where a professional bookkeeper becomes an invaluable asset.

Why Choose Barbara’s Bookkeeping for Making Tax Digital for Income Tax Self-Assessment?

Here’s how we can help you seamlessly transition and comply with MTD for ITSA:

• Expert Guidance and Software Selection: We are well-versed in HMRC’s MTD requirements and can advise on the best HMRC-compatible software for your specific business or property portfolio (e.g., Xero, QuickBooks, FreeAgent). We can help you set up and integrate the software, ensuring a smooth transition from your current record-keeping methods.
• Accurate Digital Record Keeping: We will ensure your income and expenses are meticulously recorded digitally, adhering to MTD standards. This includes ensuring all necessary transaction details (date, amount, category) are captured correctly.
• Timely Quarterly Submissions: Managing quarterly submissions can be time-consuming and daunting. We can prepare and submit these updates on your behalf, ensuring accuracy and meeting critical deadlines, thus helping you avoid penalties.
• Seamless Year-End Process: We will reconcile your quarterly data, prepare your Year-End Financial Statements, and help with your Final Declaration, making your annual tax compliance far less stressful.
• Peace of Mind & Time Savings: Outsourcing your MTD compliance to a professional allows you to focus on running your business or managing your properties, safe in the knowledge that your tax affairs are in expert hands. This reduces the risk of errors and potential HMRC fines.
• Proactive Financial Insights: Beyond compliance, regular digital record-keeping facilitated by us provides real-time financial insights, allowing you to make more informed business decisions and manage your cash flow effectively.

We’re Local: We’re based in Maidstone and work with clients in The Medway Towns, Swale, Tonbridge and Ashford.

Don’t Wait – Start Your MTD IT Journey Now!

The deadlines for MTD for ITSA are approaching fast. Proactive preparation is key to avoiding stress, penalties, and ensuring a smooth transition to the new digital tax system.

Even if you’re comfortable with your current record-keeping, a consultation with a professional bookkeeper can help you assess your readiness, identify any gaps, and put a clear plan in place.

Get Expert MTD ITSA Insights

Discover how Barbara’s Bookkeeping can simplify your MTD ITSA compliance and keep your records accurate.