What is MTD ITSA and How Will It Impact Me?

Written By Ben Tooke

Important information for self-employed individuals and landlords

We’d like to keep you informed about the upcoming changes to Making Tax Digital for Income Tax Self Assessment (MTD ITSA) and what they could mean for your responsibilities—and your accountancy fees

What’s Changing?

From April 2026, self-employed individuals and landlords with total annual income over £50,000 (note: this refers to income, not profit) will need to:

  • Keep digital records

  • Use MTD-compliant software (or bridging software)

  • Submit quarterly updates to HMRC

  • Submit a final declaration after the end of the tax year

From April 2027, those with income between £30,000 and £50,000 will also be required to comply with MTD ITSA.

If your income falls within these brackets, these changes will apply to you.

What This Means for Your Fees

We believe in being transparent. MTD ITSA will require us to complete four quarterly submissions, in addition to the year-end declaration. Naturally, this increases our workload.

However, this does not mean your fees will increase fourfold. While there will be some increase, we are committed to keeping any changes fair and reasonable.

Here’s what to bear in mind:

  • Quarterly updates are generally less complex than a full tax return.

  • Using MTD-compliant software reduces processing time significantly.

  • Your input matters: The more accurate and timely your record keeping, the less work we need to do—keeping your fees down.

  • Some clients may even wish to submit quarterly updates themselves.

  • Accurate quarterly records will make the year-end process quicker and smoother.

How You Can Help Manage Costs

To minimise the impact of these changes, we recommend the following:

  • Switch to MTD-compliant software like Xero, FreeAgent, or QuickBooks. While bridging software and Excel are technically permitted, they involve more manual processes—and more time.

  • Update your records regularly, rather than in bulk at year-end.

  • Send us your documents promptly each quarter, so we can process them efficiently.

Next Steps

If you’re likely to be affected by the new MTD thresholds, we’ll be in touch to discuss your specific circumstances and make sure you’re fully prepared well ahead of time.

In the meantime, if you have any questions or would like to explore software options, please don’t hesitate to get in touch.

Ben Tooke
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