MTD ITSA stands for Making Tax Digital for Income Tax Self Assessment. It's a new way for sole traders and landlords with income over a certain threshold to report their income and expenses to HMRC. Instead of just an annual tax return, those affected will need to keep digital records and send updates to HMRC every quarter using compatible software.

You will likely be affected if you are a sole trader or a landlord with a total qualifying income (from self-employment and/or property) above:

• £50,000 from April 2026.

• £30,000 from April 2027.

• £20,000 from April 2028

The government remains committed to introducing MTD for ITSA to partnerships at a future date.

The income thresholds are based on your combined qualifying income from all your self-employment and property sources. For example, your total qualifying income is £55,000 (£25,000 of rental + £30,000 of self employed income), which is above the £50,000 threshold for April 2026. Therefore, you would likely need to follow MTD ITSA rules from April 2026.

• If your total qualifying income is over £50,000, you'll likely need to start from April 2026.

• If your total qualifying income is over £30,000 (but £50,000 or less), you'll likely need to start from April 2027.

• If your total qualifying income is over £20,000 (but £30,000 or less), you'll likely need to start from April 2028.

If you are required to follow MTD ITSA rules, you will need to:

• Keep digital records of your business income and expenses.

• Use MTD-compatible software to send quarterly updates of this information to HMRC.

• Submit a final declaration at the end of the tax year.

No, the payment deadlines for Income Tax will remain the same as they are under the current Self Assessment system (usually by 31 January following the end of the tax year).

No, MTD ITSA initially applies to income from self-employment and property. Other types of income will continue to be reported through the annual Self Assessment return. However, the final declaration under MTD ITSA will include details of all your taxable income.

Yes, the government has stated its commitment to introducing MTD for ITSA to partnerships in the future. However, the specific start date for when partnerships will need to comply with MTD ITSA has not yet been announced.