Making Tax Digital for Income Tax – Are you ready?
Making Tax Digital for Income Tax (MTD for ITSA) is one of the biggest changes to the UK tax system in recent years. If you're a sole trader, landlord, or both, it's important to understand how these changes may affect you and what steps you need to take to stay compliant.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax (MTD for ITSA) is HMRC's new digital reporting system for self-employed individuals and landlords.
Instead of keeping manual records and submitting a single annual Self Assessment tax return, affected taxpayers will be required to:
- Keep digital records of income and expenses.
- Use compatible accounting software.
- Submit quarterly updates to HMRC.
- Complete a final year-end declaration.
The aim is to reduce errors and improve compliance across the UK's tax system.
Digital record keeping
Maintain accurate and HMRC compliant digital records of all your income and expenses.
Compatible software
Utilise approved accounting software for seamless MTD submissions.
Quarterly updates
Submit regular quarterly updates to HMRC to stay on track.
Who will need to comply?
Making Tax Digital for Income Tax is being introduced in stages and will affect sole traders, self-employed individuals, and landlords based on their combined gross income from self-employment and property.
From April 2026
If your combined gross income from self-employment and property exceeds £50,000, you will need to comply with MTD for ITSA from April 2026.
From April 2027
If your combined gross income from self-employment and property exceeds £30,000, you will need to comply with MTD for ITSA from April 2027.
From April 2028 and beyond
The government has announced plans to extend MTD to individuals with qualifying income above £20,000. Qualifying income refers to your total income from self-employment and rental properties before expenses are deducted.
How VHK Bookkeeping can help
At VHK Bookkeeping, we help sole traders and landlords prepare for Making Tax Digital with confidence, ensuring your records are accurate, organised, and HMRC compliant.
Our Making Tax Digital support services
We offer comprehensive support to ensure you are fully prepared and compliant with Making Tax Digital for Income Tax. Whether you're a landlord with rental properties or a self-employed business owner, we can help you get MTD-ready and stay compliant.
Setting up digital systems
We assist in setting up efficient digital bookkeeping systems tailored to your needs.
Maintaining accurate records
Ensuring your financial records are always precise and up-to-date for HMRC compliance.
Organising income and expenses
Streamlined organisation of all your income and expense tracking.
MTD preparation
Thorough preparation of your business to meet all Making Tax Digital requirements.
Ongoing bookkeeping support
Continuous support throughout the year to manage your digital bookkeeping needs.
Free bookkeeping health check
We offer a free bookkeeping health check to identify areas needing attention before the new rules.