MTD ITSA: What It Means for You and How to Get Ready
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is one of the biggest changes HMRC has ever made to the UK tax system. And although it has been delayed a few times, HMRC has now confirmed the new start dates — and it will affect millions of landlords and sole traders.
If you earn property income or run a self-employed business, this is something you must prepare for well in advance. Waiting until the deadline will cause stress, mistakes, and unnecessary penalties.
In this blog, I’ll break down what MTD ITSA actually means in plain English and what you need to do now to stay compliant — and stay in control of your numbers.
What Is MTD ITSA?
MTD ITSA is HMRC’s new digital reporting system for:
Sole traders
Landlords
Anyone with total business and/or property income above £10,000 per year
Instead of filing one Self Assessment tax return once a year, you will send quarterly summaries to HMRC plus a final annual submission.
This means four extra deadlines every year — but the idea is to give people better visibility of their numbers, so there are no surprises at the end of the tax year.
When Does MTD ITSA Start?
HMRC’s current timeline:
April 2026
Applies to individuals with income over £50,000 (combined business + property)
April 2027
Expands to those earning £30,000–£50,000
Under £30,000?
Currently under review — but HMRC still expects all taxpayers to move to digital record-keeping eventually.
What Will You Actually Have to Do?1. Keep Digital Records
Paper records will no longer count as compliant.
You’ll need to use software such as Xero (which we recommend and support fully) to record income and expenses.
2. Submit Quarterly Updates
Every three months, you’ll send HMRC a “snapshot” of your figures through approved software. These are not full accounts — just totals of income and expenses.
3. Submit an End-of-Period Statement (EOPS)
This replaces the old Self Assessment return for your business or property income. It finalises your numbers for the year.
4. Submit a Final Declaration
This ties all your income sources together (similar to the current SA100) and confirms your taxable income for the year.
Why Is HMRC Doing This?
Three main reasons:
Reduce errors in tax returns
HMRC believes digital records will dramatically cut mistakes.Faster visibility of tax liabilities
Quarterly reporting means you won’t wait until January to find out your tax bill.Push towards digitalisation
Similar to MTD for VAT — the end goal is a fully digital tax system.
How Charles Accountancy Will Make This Easy for You
Let’s be honest — for most sole traders and landlords, this is a hassle you don’t need.
But with the right system set up early, MTD ITSA becomes simple.
Here’s how we help:
✔ Software setup in Xero
We get your digital records organised correctly from day one.
✔ Quarterly support
We’ll handle or review your quarterly submissions so they’re accurate and on time.
✔ Tax planning throughout the year
Quarterly numbers give us live data. This means better planning, better forecasting, and no surprise tax bills.
✔ Training & guidance
If you want to be more hands-on, we’ll train you on exactly what to do — no jargon, no confusion.
Why You Should Start Preparing Now
Although the deadlines feel far away, here’s the reality:
Switching software takes time
Getting used to digital record-keeping takes time
Cleaning up messy bookkeeping takes even more time
Clients who prepare early will glide into MTD.
Clients who wait until 2026 will panic.
My advice?
Start getting your system in place over the next 12 months. You’ll thank yourself later.
Final Thoughts
MTD ITSA is a major shift — but with proper support, it doesn’t need to be stressful. At Charles Accountancy, we’re already helping clients make the transition smoothly, with simple systems that save time and reduce tax headaches.
If you’re a landlord or sole trader and you’re unsure how these changes affect you, get in touch.
We’ll explain everything clearly and get you fully ready long before HMRC’s deadlines arrive.
No stress, no panic — just clarity and control.