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    Tag: making tax digital for income tax self-assessment

    First Making Tax Digital for Income Tax mandation letters issued by HMRC

    Posted on by Rebecca Campbell

    Sole traders and landlords who submitted their 2024/25 Self Assessment tax return by the end of August 2025 will soon receive the first notifications from HMRC, confirming that they must comply with Making Tax Digital (MTD) for Income Tax from April 2026.

    Who needs to comply with MTD for Income Tax?

    You’ll be required to join MTD for Income Tax from April 2026 if your 2024/25 tax return shows gross income from self-employment and/or property exceeding £50,000.

    HMRC will be sending out official mandation letters to those taxpayers to inform them that they must follow the new digital reporting rules.

    Understanding your responsibilities

    Even though HMRC is issuing mandation letters, it remains your responsibility to:

    • Check whether you fall within the scope of MTD for Income Tax from April 2026
    • Sign up for MTD for Income Tax when required

    If you believe you meet the criteria but haven’t received a letter, you should still register for MTD.
    If you’re unsure, our team of MTD experts can help you determine whether you fall under the requirements.

    When are the letters being sent?

    • November 2025: The first batch of mandation letters is now being issued to those who filed their 2024/25 tax return by 31 August 2025.
    • February–March 2026: HMRC will send letters to those who file their returns between September 2025 and January 2026.

    Towards the end of November 2025, HMRC will also send “prompt letters” to unrepresented taxpayers who haven’t yet filed their 2024/25 tax return. These letters act as a reminder of the upcoming April 2026 start date, based on information from 2023/24 tax returns.

    What the letters include

    Both mandation and prompt letters explain:

    • What’s required under MTD for Income Tax
    • Who needs to comply from April 2026
    • How to prepare and sign up

    Each letter also contains a QR code linking to further guidance and resources from HMRC.

    Get in touch

    If you fall under the scope of Making Tax Digital and aren’t sure where to start – or haven’t yet ensured you’ll be compliant from April 2026 – get in touch with our MTD experts.

    We’ll talk you through your options and next steps.
    📧 Email: enquiries@pmm.co.uk

    Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) drop-in days

    Posted on by Rebecca Campbell

    Are you ready for Making Tax Digital for Income Tax Self Assessment (MTD for ITSA)? Whether you’re already using digital tools or still figuring out your next steps, PM+M’s MTD specialists are here to help.

    We’re hosting two free drop-in days where you can speak directly with one of our MTD experts about any queries you may have – no appointment necessary.

    • Thursday 25 September at our Blackburn office
    • Tuesday 30 September at our Bury office

    What’s happening on the day?

    Throughout the day (10am – 4pm), we’ll be offering 1-to-1 advice sessions where you can ask us anything related to MTD for ITSA, including:

    • How MTD for ITSA affects you and your business
    • What digital records you need to keep
    • Setting up and using compliant software
    • Our recommendations on the best cloud-based tools and integrations to suit your requirements
    • Making the transition from traditional to cloud accounting as smooth and efficient as possible

    Late penalties for MTD non-compliance are increasing – making it more important than ever to get ahead of the changes.

    Who is it for?

    This event is open to everyone – you don’t need to be a PM+M client. The drop-in day would be particularly beneficial to:

    • Sole traders looking to streamline tax reporting
    • Landlords needing to understand new income reporting rules
    • Finance teams adapting to digital tax systems

    Drop in and see us

    We would love to see you for a brew and a chat – just drop into one of our offices on the dates below between 10am and 4pm.

    Our office address details can be found below:

    25 September – Blackburn office

    New Century House
    Greenbank Technology Park
    Challenge Way
    Blackburn
    BB1 5QB

    30 September – Bury office

    First floor
    Sandringham House
    Hollins Brook Park
    Pilsworth Road
    Bury
    BL9 8RN

    Event spotlight: Making Tax Digital for Income Tax Self Assessment

    Posted on by Rebecca Campbell

    PM+M are delighted to be presenting at the EnterprisingYou event on all things Making Tax Digital – advising trading businesses on the new changes to digital tax and self assessment.

    If you’re a sole trader, landlord, or part of a small business preparing for the upcoming changes to Income Tax Self Assessment, this event is for you. The government’s Making Tax Digital (MTD) initiative is rolling out new digital tax reporting requirements, and from April 2026, those with annual income over £50,000 will need to comply.

    Join Rosie Cooper, director in the cloud accounting team at PM+M, for a comprehensive session hosted by GM Business Growth Hub’s EnterprisingYou in partnership with Rochdale Development Agency, Bury Council, and Oldham Council. Find out everything you need to know about transitioning smoothly to MTD for ITSA and avoid costly penalties.

    Why should I attend?

    • Get clear on who MTD for ITSA affects and key deadlines
    • Discover how to move from traditional to cloud accounting software
    • Hear real-life success stories on scaling businesses with digital tools
    • Ask your specific questions during an interactive Q&A

    Who is it for?

    • Sole traders looking to streamline tax reporting
    • Landlords needing to understand new income reporting rules
    • Finance teams adapting to digital tax systems
    • Micro, small, and medium enterprises preparing for MTD compliance

    When and where?

    Date: Thursday 17 July 2025
    Time: 9:30AM – 12:00PM
    Location: Fire Up, Maclure Road, Rochdale, OL11 1DN

    Book your place

    Late penalties for MTD non-compliance are increasing – making it more important than ever to get ahead of the changes. This fully funded session (for eligible Greater Manchester businesses) will equip you with the knowledge and tools to stay compliant and confident.

    👉 Click here to register your place

    MTD for ITSA Questions and Answers

    Posted on by Helen Buchan

    What does MTD for ITSA stand for?

    MTD for ITSA stands for Making Tax Digital for Income Tax Self-Assessment.

    What is MTD for ITSA?

    Essentially, it’s a fundamental change to the way personal tax information must be reported to HMRC.

    What will change when MTD for ITSA becomes compulsory?

    It will require digital record keeping and digital submissions, through your own software, of income and expense information on a quarterly basis, followed by an End of Period Statement (EOPS).

    Who will MTD for ITSA impact?

    MTD for ITSA will impact all taxpayers with a gross income of £10,000 or more from self-employment and/or property rental.

    When will the changes come into force?

    It is due to become compulsory in April 2024.

    Are there any exceptions to the changes?

    Trusts, estates, trustees of registered pension schemes and non-resident companies.

    General partnerships that earn more than £10,000 per year and have only individuals as partners (April 2025) and all other partnerships at a future date to be confirmed.

    Businesses exempt from MTD for VAT will also be exempt from MTD for ITSA and there will be digital exclusions available for some individuals.

    Do I need to do anything now?

    Whilst April 2024 may seem quite some time away, considering the changes and making adjustments to the way you record your income and expense information now could make your life much easier in the long run.

    How do I keep a digital record?

    The digital record keeping requirement will mean taxpayers will have to use an accounting-MTD software package to record all the financial transactions for the period.  This software will then prepare the quarterly returns and end of period statement.  A submission will be made via the software by a digital link to HMRC.

    How will the reporting requirements work?

    For each trading or property business, a quarterly report of income and expenses will need to be submitted. The first of these quarterly updates will be due for filing by 5 August 2024, and will cover either the quarter ended 5 July 2024, or 30 June 2024 (where a calendar quarter election is in place).

    Separate quarterly updates will be required for each trade or category of property business but there is no requirement to make tax or accounting adjustments to the information provided in quarterly updates.

    An end of period statement, EOPS, for each business is required and effectively replaces the tax return for those income sources.

    The EOPS will cover the tax year (regardless of the accounting period of the business) and will be due for filing by the normal self-assessment deadline of 31 January following the relevant tax year. All property businesses must use the tax year as the accounting basis period, but trades can use any accounting period.

    The MTD ITSA regime will incorporate all the reporting required on the current self-assessment tax return into a ‘finalisation’ or ‘crystallisation’ statement. This statement will bring together all the information included in the MTD reports, plus other taxable income, such as investment and employment income, to calculate the tax liability for the tax year. This will be due by 31 January after the end of the tax year.

    This is in total 6 reports that need to be filed with HMRC – 4 x quarterly reports; 1 x EOPS; 1 x tax return.

    Other considerations

    There are lots of changes coming and it is important that you are equipped with the information needed and well prepared to implement the required changes before they become compulsory. Our dedicated MTD for ITSA team are perfectly positioned to support you and your business, and will be happy to chat through how the changes are going to impact you. Get in touch by emailing enquiries@pmm.co.uk or calling 01254 679131.

    A comment to note that the article does not constitute personalised advice and that advice should be sought before taking any action.