Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) is the next phase of the UK government’s plan to modernise the tax system. After several delays, the rollout is officially scheduled to begin in April 2026 for certain taxpayers, with wider mandatory adoption following.
What Is MTD ITSA?
MTD ITSA requires businesses and landlords to keep digital records and send quarterly income updates to HMRC using compatible software. The aim is to reduce errors, streamline record-keeping, and provide taxpayers with more real-time clarity over their tax position.
Who Must Comply?
The phased implementation is expected to begin with:
- Self-employed individuals with income over £50,000 (from April 2026)
- Self-employed individuals with income over £30,000 (from April 2027)
Landlords with qualifying income fall under the same rules.
What Will Change?
- Quarterly digital submissions
- An End-of-Period Statement (EOPS)
- A Final Declaration replacing the annual self-assessment return
- Requirement to maintain digital records via approved software
Why the Change?
HMRC states that digital reporting improves accuracy and reduces tax gaps caused by avoidable mistakes. For businesses, the new system encourages more organised financial management.