MTD ITSA
What does it mean for me?
From April 2026, HMRC is changing how Self Assessment works for people with self-employed and or rental income. This change is called Making Tax Digital for Income Tax.
If it applies to you, you will no longer submit just one tax return each year. Instead, you will need to keep digital records and submit quarterly updates to HMRC using approved software. This is a mandatory change, not optional.
• Making Tax Digital for Income Tax may apply to you if you have self-employed and/or rental income.
• It is based on your total income before expenses, not the profit you make after costs.
• Income such as PAYE salary, dividends, and savings interest does not count towards the income total.
The date you are brought into Making Tax Digital depends on your level of qualifying income:
• From April 2026 - if self-employed and or rental income is over £50,000
• From April 2027 - if self-employed and or rental income is over £30,000
• From April 2028 - if self-employed and or rental income is over £20,000
Once you are in scope, you will need to submit quarterly updates every year going forward. HMRC may charge a penalty if returns are not submitted.
If Making Tax Digital applies to you, HMRC will require you to:
• Keep your business or rental records in a digital format
• Use HMRC-approved software such as QuickBooks, Xero, or FreeAgent
• Send quarterly updates to HMRC during the year
• Send a final declaration after the end of the tax year
Quarterly updates are only reports of your income and expenses. They do not change how often you pay tax.
• Making Tax Digital is a mandatory change, but with the right preparation it does not need to be disruptive.
• We can manage the process end to end, including selecting and setting up compliant software, maintaining digital records, preparing and submitting quarterly updates, and completing your final annual declaration.
• Whether you prefer full ongoing management or support with specific parts of the process, we will agree the right level of service for you.
• If you would like clarity on how this applies to you and the next steps, get in touch and we will arrange a discussion.
Get in touch: info@frameworkaccounting.co.uk
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