Are you aware change is coming.
If you are VAT registered, then you should already be using digital software to keep your records.
However, it is being introduced on a wider scale.
Income Tax: MTD for Income Tax Self Assessment (ITSA) will start from April 2026 for self-employed individuals and landlords with annual business or property income over £50,000. This requirement will extend to those with income between £30,000 and £50,000 from April 2027, and those with income between £20,000 and £30,000 from April 2028.
We can help you get compliant with relevant software to your need in order to meet the requirements of Making Tax Digital. Please feel free to contact us to discuss your needs and any concerns that you may have with this.
We understand that the additional cost of software in order to make these submissions is not a welcome change and can be expensive. We have a few alternatives to chose from depending on your circumstances. We will find the best fit, from both perspectives – requirements and cost.
And don’t forget that your initial consultation is free! So you have nothing to lose (and everything to gain) by speaking to us.
A summary of the changes are as follows:
Making Tax Digital – VAT
To comply with MTD for VAT, from April 2022 you must keep all of your VAT records digitally using MTD-compliant software like Xero.
You must also submit your VAT returns to HMRC online rather than complete and send in manual returns by post as in the past. If you don’t, you face a £400 penalty for each wrongly submitted return.
Making Tax Digital – for Income Tax (MTD ITSA)
Making Tax Digital for Income Tax Self Assessment goes live for self-employed people, landlords and partners from starting from April 2026. The first group required to start from April 2026 are those with a turnover over £50,000. Those over £30,000 from April 2027 and those over £20,000 in 2028.
As with MTD for VAT, you will need to use approved software to submit your Self Assessment Tax Returns. However, instead of making an annual tax return, you will need to make quarterly submissions. These will due on the fifth day of August, November, February and May.
As well as submitting quarterly returns, you’ll need to submit an End of Period Statement by 31st January each year. This lets you make adjustments, such as to capital allowances and losses. You can also declare other income and capital gains via a Finalisation Statement, which is due on the same date.
Although you will have to make quarterly Self Assessment Returns via your software, you will still pay your Income Tax on the same dates – the main bill by 31st January and your payment on account by 31st July.
Making Tax Digital – Corporation Tax
Making Tax Digital for Corporation Tax will be the last plank of MTD to be put in place. However, in July 2025 it was confirmed that HMRC will not be going ahead with it.
We will of course update you as and when this changes.