Get Ready for MTD ITSA: What You Need to Know

Get Ready for MTD ITSA: What You Need to Know

The countdown is on! Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) is coming in 2026, and it’s set to revolutionise how individuals and businesses in the UK report their income tax. If you’re a self-employed individual, a landlord, or a business owner, it's time to start preparing for these significant changes.

What is MTD ITSA?

MTD ITSA is the government's initiative to digitise the income tax system. Starting in April 2026, taxpayers with income over £50,000 will be required to submit their tax returns using compatible software, instead of manually filing paper tax returns. The aim is to streamline the process, reduce errors, and improve efficiency in tax administration.

Key Changes to Expect

1. Quarterly Updates: Taxpayers will need to submit quarterly updates instead of a single annual tax return. This means you’ll need to track and report your income and expenses regularly, which will help you keep on top of your tax obligations throughout the year.

2. Digital Record-Keeping: MTD ITSA requires businesses to maintain digital records of their income and expenses. Gone are the days of paper receipts and handwritten ledgers. You’ll need to use software that integrates with HMRC systems to store and submit your records.

3. End of the Annual Tax Return: No more scrambling to file your tax return by January 31st each year. With MTD ITSA, your quarterly updates will replace the need for an annual self-assessment return. However, a final end-of-year summary will still be required to reconcile any discrepancies.

4. Software Requirements: You’ll need to use MTD-compatible software to comply with the new regulations. There are several software solutions available, and we can help you choose the one that best fits your business needs.

How Magna Carta Bookkeeping Can Help

The transition to MTD ITSA might feel overwhelming, but you don’t have to go it alone. At Magna Carta Bookkeeping, we’re here to help you navigate the upcoming changes. Our expert team can assist with:

• Choosing and setting up the right software for your business

• Managing your quarterly updates and digital record-keeping

• Providing ongoing support and advice to ensure full compliance

• Offering training to help you stay on top of your tax reporting

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By getting ahead of the changes now, you’ll not only ensure compliance, but also make tax time easier and more manageable. Don’t leave it until the last minute—start preparing today!

Ready to Get Started?

If you're unsure where to begin or need assistance with MTD ITSA, get in touch with us at Magna Carta Bookkeeping. We offer tailored services that take the stress out of bookkeeping and tax reporting, allowing you to focus on running your business.

Contact us today for a consultation and let us guide you through the MTD ITSA transition with ease.