As part of the government’s initiative to modernise the tax system, Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) will be phased in from April 2026.
HMRC’s Making Tax Digital for Income Tax makes it mandatory for self-employed individuals and landlords to use approved software to maintain digital records and submit quarterly updates summarising the income and expenditure for the period.
For businesses and individuals who are impacted, this will be a significant change and the earlier you act, the better positioned you’ll be to stay compliant.
To address non-compliance, HMRC is introducing a new penalties regime as part of Making Tax Digital. Businesses and individuals who fail to keep digital records or miss submission deadlines will incur penalty points, with a £200 fine issued once a points threshold is reached. Continued non-compliance can lead to repeated fines, and late payments may attract interest and further charges. These changes make it essential to stay on top of your obligations to avoid unnecessary penalties.
Key benefits of MTD ITSA
Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) offers several benefits for business owners:
- Improved financial management
- Reduced errors
- Time efficiency
- Real-Time tax information
- Compliance
Improved financial management
Improved financial management
With quarterly updates, business owners can obtain a clearer picture of their tax liabilities throughout the year, aiding better financial planning and cash flow management.
Speak To An ExpertReduced errors
Reduced errors
Digital record-keeping minimises the risk of errors that can occur with manual entries, ensuring more accurate tax submissions.
Speak To An ExpertTime efficiency
Time efficiency
Using MTD-compatible software simplifies the process of recording income and expenses, saving time that can be better spent on other business activities.
Speak To An ExpertReal-Time tax information
Real-Time tax information
Access to real-time tax data helps business owners stay on top of their tax obligations and avoid last-minute surprises.
Speak To An ExpertCompliance
Compliance
MTD ITSA ensures that businesses stay compliant with HMRC regulations, reducing the risk of penalties for late or incorrect filings
Speak To An ExpertOur recommended software
When is it happening?
April 2025 – PM+M commenced BETA testing for Making Tax Digital for Income Tax
April 2026 – Making Tax Digital for Income Tax becomes mandatory for sole traders and self-employed individuals with an annual income of £50,000 or more. If this applies to you, you will need to register for MTD by April 2026.
7th August 2026 – Deadline to submit returns for tax period 6 April 2025 – 5 July 2026
7th November 2026 – Deadline to submit returns for tax period 6 April 2026 – 5 October 2026
7th February 2027 – Deadline to submit returns for tax period 6 April 2026 – 5 January 2027
April 2027 – Making Tax Digital for Income Tax threshold lowers to £30,000. If this applies to you, you will need to sign up for MTD by April 2027
7th May 2027 – Deadline to submit returns for tax period 6 April 2026 – 5 April 2027
April 2028 – Making Tax Digital for Income Tax threshold lowers to £20,000. If this applies to you, you will need to sign up for MTD by April 2028.
What you can expect
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Expert support
Navigating tax changes can be tricky. Our expert team of tax and cloud accountants are here to ensure a smooth and seamless transition to MTD. With years of experience successfully transitioning clients to MTD for VAT, we understand the complexities involved. We also provide comprehensive training on accounting software, equipping you and your team with the confidence and tools needed to stay compliant and efficient in a digital tax environment.
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Our recommended Software
Based on individual circumstances, we will recommend the best software for you. All of the software providers we work with feature on HMRC’s approved supplier list, and our team will assess your specific needs and recommend the software that’s right for you. Whether you’re new to digital accounting or looking to improve your current setup, we’ll ensure you’re using trusted, user-friendly software that ensures you are compliant, efficient, and ready for the future of tax.
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Compliance
Making Tax Digital is a new requirement, but digitalisation is our expertise. We’ve been at the forefront of accounting digitalisation for over a decade, long before HMRC made it mandatory. Our cloud accounting specialists have supported many UK businesses in moving from manual systems to digital, cloud-based solutions. With years of experience, our team is well-versed in digital compliance.
Explore Our Packages
Whether you just need help getting started, or require our full support, we have a package to suit your needs...
Link up package
- Registration for ITSA
- Guidance on selecting and setting up MTD compatible software
- Easy-to-follow training guides
- Review and submission of your first quarterly update
Sync package
- Registration for ITSA
- Guidance on selecting and setting up MTD compatible software
- Easy-to-follow training guides
- Continuous review and submission of quarterly updates
Core package
- Registration for ITSA
- Guidance on selecting and setting up MTD compatible software
- Easy-to-follow training guides
- Full preparation, processing, and submission of all required updates
Flow package
- Registration for ITSA
- Guidance on selecting and setting up MTD compatible software
- Easy-to-follow training guides
- Full preparation, processing, and submission of all required updates
- Annual self-assessment return included
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Speak To An Expert
For an initial consultation with one of our specialists, feel free to give us a call on 01254 679131 or email us on enquiries@pmm.co.uk, and one of our team will be happy to arrange an appointment.
