Making Tax Digital for Income Tax
Get ahead of the changes—Zip Accounting will help you prepare, stay compliant, and take the stress out of MTD for ITSA.
MTD Services
- MTD for ITSA starts in April 2026 for those earning >£50k from self-employment and rental income (combined)—others will follow in 2027 and 2028
- Affected individuals must use digital software and submit quarterly updates to HMRC, plus an end of year return
- Zip Accounting can manage the on-going requirements, help with software setup, and advise on readiness
Get in touch to discuss how Zip Accounting can help
HMRC is modernising the tax system through its Making Tax Digital (MTD) initiative—and the next step is MTD for Income Tax Self Assessment (ITSA).
This change affects sole traders and landlords, and will mean submitting quarterly digital updates with an end of year return to HMRC rather than one annual tax return.
A new system of penalties for late filing and late payment of tax will also be introduced.
MTD for VAT is already in place. From April 2026, MTD for ITSA will be phased in, starting with individuals whose total combined income from sole trade and property exceeds £50,000 per year. Further groups will follow in 2027 and 2028.
If this applies to you, it’s time to prepare.
What MTD for ITSA Involves
- Keeping digital records using MTD-compliant software
- Sending quarterly income and expense updates to HMRC via the software
- An annual end of year submission will still be required, but in a new format
This will apply if your combined gross income from sole trade and property meets these thresholds:
- > £50,000 from April 2026
- > £30,000 from April 2027
- > £20,000 from April 2028
The income reported on your 2024/25 tax return will determine whether you are brought into the scheme in April 2026. HMRC may already have sent you a letter based on your 2023/24 tax return.
What If You Can’t Engage Digitally?
HMRC will allow an exemption, for those considered ‘digitally excluded’.
This includes those for whom the use of computers would not be reasonable or practical due to age, disability or location, as well as those who object to using computers on religious grounds.
Details on how to apply for the exemption will be released closer to the deadline.
How Zip Accounting Can Help
Zip Accounting can:
- Handle all MTD for ITSA requirements on your behalf
- Help you implement compatible software
- Review your income to determine your MTD start date
- Advise whether you need a dedicated business bank account for clarity in reporting
- Ensure you’re registered with HMRC and signed up correctly through your software
Don’t wait until the last minute—get in touch today if your income is likely to be over the threshold.
MTD for ITSA – Implementation Checklist
- Forecast or review your 2024/25 income to anticipate MTD requirements
- Confirm when MTD will apply to you based on the thresholds shown above
- Set up or check your MTD-compliant software
- Register for MTD with HMRC and via your software provider
Contact Zip Accounting for a personalised plan and checklist This is a general guide—reach out to receive a plan tailored to your individual circumstances.