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Fast approaching: MTD for ITSA. Is your business set for change?



A while back, we highlighted some big changes on the horizon for self-employed people and landlords in the UK regarding how they report their earnings to HMRC. Now, with just over a year to go, it’s a good time to revisit what’s happening, and why it’s worth preparing sooner rather than later.


From 6 April 2026, if your total income is more than £50,000 a year from business and/or property income, you'll need to follow new Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) rules. This means no more single annual tax returns. Instead, you’ll need to submit quarterly updates online, reporting your total income for each period. The first update — for the quarter ending June 2026 — must be submitted by the end of July 2026, with further updates required every three months.


If your income is over £30,000, you’ll have until April 2027 before you need to comply. And by 2030, the threshold is expected to drop to £20,000, pulling even more people into the system.


Sounds like a big shift, but the idea is to make tax reporting easier, more accurate, and less stressful in the long run.


What stays the same?

One key point: this doesn’t change when or how you pay your tax — just how you report it. It also follows the recent move to align all self-employed taxpayers with an end-of-tax-year date.


Some types of income are excluded, including salaries, dividends, and pensions. Partnerships don’t have to comply (for now), though your share of partnership profits will still need to be included in your personal tax return.


Why this matters now

The tricky part is that the new scheme starts before you even submit your 2026 tax return. This means that during the 2026/27 tax year, you’ll be dealing with both quarterly reporting and your Self Assessment submission for 2026 at the same time —something to keep in mind, especially if you use an accountant.


Like the move to online VAT returns and PAYE submissions, compliance will require proper accounting software. Making sure yours is up to scratch and set up correctly for your business will save you headaches later.


What should you do now?

With just over a year to prepare, it’s a good time to start getting ready. The last time this many taxpayers were affected was the introduction of Self Assessment in 1997, so it’s a big deal.

  • Check if your accounting software is MTD-compliant. HMRC will provide a list of approved software options.

  • Get comfortable with digital record-keeping before the deadline sneaks up.

  • Speak to your accountant if you’re unsure how these changes will affect you.


HMRC is steadily moving towards a fully digital tax system, and MTD for ITSA is a major step in that direction. Getting comfortable with digital record-keeping early will make the transition much easier.


If you’re unsure what to do next, have a chat with us at ESB Accountancy, or check out GOV.UK for the latest details.

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