Making Tax Digital for Income Tax Self Assessment


On 22nd February 2024 the amended regulations for Making Tax Digital for Income Tax Self Assessment were laid down as part of the Income Tax (Digital Requirements) (Amendment) Regulations 2024.

Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) will come into effect on 6th April 2026 for those businesses and landlords with incomes greater than £50,000; and 6th April 2027 for those with incomes greater than £30,000.  Those with incomes below £30,000 will not be subject to MTD for ITSA AFTER 2027, although the Government has said that this will be kept under review.

In developing the Regulations, HMRC undertook a Small Business Review which led to a number of measures to simplify the MTD ITSA.  This included:

  • quarterly reporting will be on a cumulative basis, so taxpayers will not need to resubmit a report in the event of an amendment or error
  • quarterly reporting will be mandated for the 7th of the month, so it is line with VAT reporting obligations
  • the requirement to complete End of Period Statements for each source of income will be removed
  • landlords of a jointly-owned property can opt not to submit expenses within quarterly reports, and keep less detailed digital records
  • Foster carers and those without national insurance numbers will be exempt from the process
  • Three-line accounts will still be supported

What will happen?

You need to submit your Self Assessment tax return for 2024 to 2025 by 31 January 2026.  HMRC will review your return and check if your qualifying income is more than £50,000.  If it is, HMRC will write to you to confirm that you must meet the MTD for ITSA requirements by 6th April 2026.

The requirements are that you must use software that’s compatible with MTD for ITSA to record your income and expenditure; and you must sign up for MTD for ITSA.

There are a number of different compatible software packages available, including QuickBooks Online (Intuit), Sage, Xero and FreeAgent.  If you would like to discuss which package is right for you, please speak to Jackie, Andrew or Siobhan.


Castletons Accountants

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