Making Tax Digital for Income Tax Self Assessment (MTD IT) is on the horizon, bringing big changes to how self-employed individuals and landlords manage their tax. At We Balance Bookkeeping, we’re here to guide you through the process with clarity and confidence.
If you’re a Sole Trader, landlord, or self-employed professional, you’ve probably heard of Making Tax Digital (MTD). This government initiative is designed to make tax administration more efficient and easier to manage by moving everything online.
Now, it’s Income Tax Self-Assessment’s (ITSA) turn to join the MTD revolution. But what does this mean for you, and how can you prepare? Don’t worry—I’ve got you covered!
What Is MTD ITSA?
MTD ITSA is part of HMRC’s initiative to modernise the tax system. It requires individuals to keep digital records of their income and expenses and submit quarterly updates to HMRC using MTD-compatible software.
Why Is MTD ITSA Being Introduced?
The goal of MTD ITSA is to simplify the tax process, reduce errors, and help you stay on top of your finances. By maintaining up-to-date digital records and submitting regular updates, you’re less likely to face surprises at tax time—like unexpected bills or missed deadlines.
Who does MTD ITSA apply to?
MTD ITSA will affect:
- Self-employed individuals and landlords earning over £50,000 per year from April 2026.
- Those earning between £30,000 and £50,000 from April 2027.
- Those earning over £20,000 from April 2028.
What Does MTD ITSA Mean for You?
If you’re already using software to manage your self employed and property accounts, you’re a step ahead! But if your bookkeeping is still done manually or through spreadsheets, now’s the time to transition to a digital solution. Here’s what you’ll need to do:
- Use MTD-Compliant Software: HMRC requires you to use approved software to record your income and expenses and send updates. Popular options include QuickBooks, SAGE, and FreeAgent.
- Submit Quarterly Updates: Instead of one annual return, you’ll send a summary of your income and expenses every three months.
- Submit an End of Period Statement (EOPS) at the end of the tax year to confirm your figures.
- Finalise Your Tax Year: At the end of the tax year, you’ll make a final declaration to confirm your total income and pay any tax due.
How to Get Ready for MTD ITSA
- Check Your Eligibility: Determine when you’ll need to start using MTD ITSA based on your income level.
- Choose the Right Software: Select an MTD-compliant software that suits your business needs. Need help deciding? I can recommend options tailored to you.
- Organise Your Records: Make sure your income and expense tracking is up-to-date. The transition will be much smoother if your bookkeeping is already in good shape.
- Seek Support: If you’re unsure where to start, don’t hesitate to ask for help. I’m here to guide you through the process and ensure you’re fully prepared.
What happens if I don’t comply?
Non-compliance with MTD ITSA may result in penalties from HMRC, including fines for late submissions or failure to maintain digital records.
How can We Balance Bookkeeping help?
I understand that adapting to MTD ITSA can feel overwhelming, but I’m here to make it stress-free. I provide:
Ongoing support to keep you compliant and worry-free.
- Personalised advice based on your circumstances.
- Setup and training for MTD-compatible software.
- Assistance with quarterly updates and year-end submissions.
Still Have Questions? Let’s Chat!
At We Balance Bookkeeping, we specialise in helping self-employed individuals and landlords stay on top of their finances. Whether you’re looking for guidance on software or need a hand with record-keeping, I’m just a message away.
Contact me today for personalised support with MTD ITSA. Let’s simplify your finances and tackle MTD ITSA together!
