With the UK government rolling out Making Tax Digital for Income Tax Self Assessment (MTD ITSA), businessesand landlords must prepare for a significant shift in how they report and manage their tax obligations. If you earn more than £10,000 annually from self-employment, property income, or a combination of both, this change will likely affect you.
What Is MTD ITSA?
MTD ITSA is a major part of the government's broader Making Tax Digital initiative, designed to modernise tax reporting. Instead of submitting one annual Self Assessment tax return, taxpayers will need to:
- Keep digital records of their income and expenses using compatible software.
- Submit quarterly updates to HMRC.
- File an end-of-period statement (EOPS) and a final declaration.
This new system aims to improve accuracy, reduce errors, and streamline the tax process. MTD ITSA is expected to be mandatory from April 2026 for taxpayers with an income over £50,000, and from April 2027 for those earning between £30,000 and £50,000.
How to Start Preparing for MTD ITSA
Transitioning to MTD ITSA can feel daunting, but early preparation is key:
- Assess Your Current Record-Keeping Practices - Ensure your income and expenses are accurately recorded digitally. Manual processes will no longer suffice.
- Invest in MTD-Compatible Software - Select HMRC-approved software that aligns with your business needs.
- Understand Quarterly Reporting - Familiarise yourself with the requirements for submitting updates every three months.
- Seek Professional Guidance - Avoid unnecessary stress by working with experienced advisers who can guide you through the process.
How CityEdge Can Help
At CityEdge, we are more than just accountants—we are your strategic partners in ensuring compliance and operational efficiency. Our MTD ITSA support services include:
- Digital Record-Keeping Solutions - We help set up and manage MTD-compliant software tailored to your needs.
- Quarterly Update Management - Let us handle your quarterly submissions to HMRC, ensuring accuracy and timeliness.
- Tailored Advice and Training - We provide personalised guidance to help you navigate MTD ITSA with confidence.
- End-to-End Compliance - From initial setup to final declarations, we ensure your tax affairs are fully compliant with MTD regulations.
Get Started with CityEdge Today
Don’t wait until the deadline approaches, start preparing for MTD ITSA now. Contact CityEdge for a free consultation to discuss how we can make your transition seamless and stress-free.