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Get Ready for Making Tax Digital for Income Tax Self Assessment

HMRC’s digital transformation is gathering pace, an imminent change is the rollout of Making Tax Digital for Income Tax Self Assessment (MTD ITSA).

3 Jul 2025

If you’re self-employed or receive income from property, MTD ITSA is something you’ll want to be aware of — especially as the new rules will come into effect soon.

When Does MTD ITSA Start?

The introduction of MTD ITSA will be phased based on your income:

From April 2026: If your annual income from self-employment and/or rental properties is above £50,000, you’ll need to follow the new MTD rules.
From April 2027: Those with qualifying income above £30,000 will be brought into the system.
From April 2028: If your qualifying income is above £20,000, you’ll also be required to join.

“Qualifying income” refers to income before expenses from self-employment and property combined, not your total income from all sources.

What Will You Need to Do?

If you fall within these thresholds, MTD ITSA will require you to:

Keep digital records of your income and expenses using HMRC recognised MTD software.
Submit quarterly updates to HMRC, summarising your income and expenditure.
File a Final Declaration by 31 January each year, covering any other taxable income and gains.

In short, MTD ITSA will replace the traditional annual Self Assessment tax return with a more regular and digitally focused process.

Are You Affected?

If you’re already submitting a Self Assessment return for 2023/24 and your qualifying income is within the new MTD thresholds, it’s likely that you’ll need to comply with the new rules when they come into effect.

We’re Here to Help

You won’t have to navigate the shift to this new process alone. Alliotts are here to help you prepare, implement the necessary changes, and make the transition as smooth as possible. From choosing the right software to understanding your new reporting obligations, we’ll guide you every step of the way.

Join Our Free Webinar

To help you understand the new process and what you need to do, the Shaw Gibbs Group will be hosting an informative webinar on Tuesday 22 July 2025 at 10am. We’ll walk through the key points, provide practical advice, and answer any questions you may have.

To register to attend our MTD ITSA webinar please click here.

For more information on Making Tax Digital please read our guide.