The Government has confirmed the next stage of its plan to widen the scope of Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA).
From April 2028, sole traders and landlords earning more than £20,000 annually will be required to submit tax data digitally and on a quarterly basis.
This move brings an estimated 900,000 additional individuals into the MTD system, marking a big change for many in how income tax will be reported.
Who will be brought into the new system and when?
The transition to digital tax reporting is being introduced in phases, depending on income level:
These changes aim to standardise digital reporting across a broader range of taxpayers, improve data accuracy, and reduce manual errors.
What to do now if you are affected
If your income falls within these thresholds, you should begin adjusting how you manage your financial records.
Switch to digital accounting software
Choose an HMRC-recognised platform that suits your business size and workflow. Software that integrates easily with your bank and invoices will help streamline day-to-day admin.
Get familiar with quarterly updates
Instead of one annual tax return, you will need to send updates to HM Revenue & Customs (HMRC) every three months, followed by a final end-of-year summary.
Accurate, up-to-date records will be key to meeting this requirement.
Work with a qualified adviser
Our team of accountants can help you understand what data needs to be submitted and when and identify any opportunities to improve the way you handle your tax affairs.
Keep up with changes
Requirements may evolve before each deadline arrives. Signing up for official updates or attending industry briefings will help you stay on track as further guidance is released.
Although the deadlines may seem a way off, leaving preparations too late can lead to avoidable complications.
A gradual move to digital tools and regular reporting will allow you to adjust without disrupting your workflow.
If you would like to know more about Making Tax Digital for Income Tax Self-Assessment, contact us today for help and support.
