Big changes are coming for self-employed individuals and landlords in how they report income to HMRC. Starting in April 2026, Making Tax Digital for Income Tax (MTD for ITSA) will roll out — and this time, it’s really happening.
HMRC has begun notifying those affected, and after multiple delays, there’s growing certainty that MTD for ITSA is here to stay. Why now? It’s part of HMRC’s plan to modernise tax reporting through the new Enterprise Tax Management Platform.
Keep reading to find out what this means for you and how to prepare for the change.
What Does Making Tax Digital Mean?
Making Tax Digital is a significant shift in the way individuals report their income tax. The system has been designed to streamline and modernise the tax process for certain individuals, with the goal of creating a more accurate, efficient, and real-time reporting system.
There are three key requirements under MTD for ITSA:
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Keep digital records of income and expenses.
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Submit quarterly updates to HMRC directly from these records — no manual input allowed.
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Complete a finalisation process at the end of the tax year to confirm the accuracy of all data.
Tools like Xero, QuickBooks, and FreeAgent can help you meet these requirements with minimal hassle. At Atek Accounting, we can help you set up the right software for your business needs.
Learn more about Xero setup here.
Who Is Affected by MTD — What Is the Threshold?
Starting in April 2026, self-employed individuals and landlords earning more than £50,000 in gross income from these sources will be required to follow the MTD for ITSA rules. Here’s the breakdown:
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From April 2026:
Individuals with qualifying income over £50,000 must comply. -
From April 2027:
Threshold lowers to £30,000. -
From April 2028:
Threshold further reduces to £20,000.
Qualifying income includes gross income from self-employment and property before any tax allowances or expenses are deducted. It’s important to note that partnerships aren’t currently included, but they may be added at a later date.
If your business is affected by Making Tax Digital for Income Tax, now is the time to start preparing. We can guide you through every step of the process to ensure you meet the requirements.
Who Is Exempt from Making Tax Digital?
- Exemptions: Some taxpayers automatically qualify for exemptions; this may be due to your age, religion, disability, or location, etc.
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Deferrals: Individuals who file the residence/remittance basis (SA109) will receive a deferral until April 2027.
If you’re unsure whether you qualify for an exemption or deferral, we’re here to help.
You can also check out the official HMRC exemption page for more detailed information or get in touch with us directly for advice.
How Can I Prepare for MTD for ITSA?
MTD for ITSA is going to change how you interact with HMRC and manage your annual accounts. The sooner you start planning, the better positioned you’ll be when the changes arrive. Here’s what you can do now:
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Choose the right software: You’ll need software that is compatible with Making Tax Digital (MTD), such as Xero.
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Go digital: Start tracking your income and expenses digitally. It might seem like a big change, but it will make managing your finances much easier in the long run.
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Seek advice: If you’re unsure where to start, reach out to an accountant or tax advisor. They can help you get set up and ensure everything is in order.
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Wait for HMRC: HMRC will inform you if you need to follow the new rules based on your 2024–25 tax return. However, it’s a good idea to get prepared now, just in case.
Making Tax Digital, Made Simple
At Atek Accounting, we’ll guide you through every step. From digital tools to submitting quarterly updates, we’ll help you decide how much you want to handle yourself and how much you’d like us to take care of. If you’re already working with us, we’ll help you transition smoothly.
Get in touch today for tailored advice — and take the stress out of going digital.
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