What is…
Making Tax Digital
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is an extension of the Making Tax Digital initiative that requires businesses and landlords to maintain digital records and submit quarterly updates to HMRC using compatible software. This shift aims to modernise the self-assessment system and provide more accurate, real-time data to HMRC.
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Discover
Our Partner
As the only Strategic Partner in Northern Ireland, we are proud to support QuickBooks, the world’s number 1 online accounting software.
Cloud accounting software from QuickBooks that helps you create custom invoices, manage VAT and view your data in real time.
All QuickBooks solutions will allow you to maintain compliance with Making Tax Digital quarterly and year-end submissions. As our preferred package, we are confident that it will meet all your financial compliance needs.
Speak to us to arrange a free demo today.
MTD
Key Points of MTD for ITSA:
1. Phased Implementation for Individuals:
From April 2026: MTD for ITSA will apply to individuals with qualifying income over £50,000. This will cover:
- Self-employed people (e.g. sole traders, freelancers).
- Landlords with rental income exceeding £50,000 annually.
combined sole trade and rental income of more than £50,000.
From April 2027: MTD for ITSA will extend to individuals with qualifying income over £30,000, including those with lower self-employment or rental income.
Qualifying income is the total income you get in a tax year from self-employment and property, before deduction of any expenses.
3.Software Requirements:
To comply with MTD for ITSA, individuals will need to use MTD-compatible software that can:
- Record income and expenses digitally.
- Generate quarterly updates for submission to HMRC.
- Handle tax calculations and end-of-year final declarations.
Popular cloud accounting software providers like QuickBooks, Xero, and FreeAgent are already compliant with MTD, and they will offer features that support MTD for ITSA. Our preferred cloud solution is QuickBooks and our team are fully trained in the delivery of its MTD solution.
2. What’s Required Under MTD for ITSA:
Digital Record Keeping: Affected individuals must maintain digital records of income and expenses. This means no more paper and a business bank account is a must!
Quarterly Updates: Instead of submitting an annual tax return, individuals will need to submit quarterly updates to HMRC. These updates will contain information on income and expenses, allowing for a more real-time understanding of tax obligations.
End-of-Year Final Declaration: Although quarterly updates will be required, taxpayers will still need to submit a final declaration at the end of the tax year (April 5). This will summarise the total income and tax due for the year and will serve as the final tax calculation.
4. Future Expansion to Partnerships:
MTD for ITSA is also expected to be extended to partnerships in the future. This means that partnerships, which are currently not subject to MTD for ITSA, will likely need to comply with digital record-keeping and quarterly submissions in the coming years.
1. Phased Implementation for Individuals:
From April 2026: MTD for ITSA will apply to individuals with qualifying income over £50,000. This will cover:
- Self-employed people (e.g. sole traders, freelancers).
- Landlords with rental income exceeding £50,000 annually.
combined sole trade and rental income of more than £50,000.
From April 2027: MTD for ITSA will extend to individuals with qualifying income over £30,000, including those with lower self-employment or rental income.
Qualifying income is the total income you get in a tax year from self-employment and property, before deduction of any expenses.
2. What’s Required Under MTD for ITSA:
Digital Record Keeping: Affected individuals must maintain digital records of income and expenses. This means no more paper and a business bank account is a must!
Quarterly Updates: Instead of submitting an annual tax return, individuals will need to submit quarterly updates to HMRC. These updates will contain information on income and expenses, allowing for a more real-time understanding of tax obligations.
End-of-Year Final Declaration: Although quarterly updates will be required, taxpayers will still need to submit a final declaration at the end of the tax year (April 5). This will summarise the total income and tax due for the year and will serve as the final tax calculation.
3.Software Requirements:
To comply with MTD for ITSA, individuals will need to use MTD-compatible software that can:
- Record income and expenses digitally.
- Generate quarterly updates for submission to HMRC.
- Handle tax calculations and end-of-year final declarations.
Popular cloud accounting software providers like QuickBooks, Xero, and FreeAgent are already compliant with MTD, and they will offer features that support MTD for ITSA. Our preferred cloud solution is QuickBooks and our team are fully trained in the delivery of its MTD solution.
4. Future Expansion to Partnerships:
MTD for ITSA is also expected to be extended to partnerships in the future. This means that partnerships, which are currently not subject to MTD for ITSA, will likely need to comply with digital record-keeping and quarterly submissions in the coming years.
About Us
Why Us
No nonsense accounting for sole traders & landlords
A dedicated accountant or tax adviser
We are experts in QuickBooks & cloud accounting
Tailored packages to suit
Subscription based service
We pride ourselves on our response rate
Customer service is what we do best
Why Is This Happening?
The aim of MTD for ITSA is to:
Increase Efficiency: Moving to a digital system makes tax administration more efficient, reducing the burden on individuals and businesses while allowing HMRC to receive more timely and accurate data.
Improve Accuracy: By eliminating manual processes and reducing human error, MTD aims to make tax reporting more accurate, reducing underpayments or overpayments.
Real-Time Tax Reporting: Quarterly updates help taxpayers stay on top of their tax liabilities and avoid large surprises at the end of the year.
Key Benefits of MTD for ITSA:
Real-time updates: Taxpayers can track their income and expenses throughout the year, which reduces the risk of mistakes or missed deductions.
Less paperwork: The need for physical paperwork is reduced, and everything is managed digitally.
Better tax planning: Quarterly updates help businesses and landlords plan their tax payments throughout the year rather than facing a large, lump sum at the end of the year.
Automation: With the use of compatible software, the system automates much of the process, making tax filing faster and easier.
Who Will Be Affected?
Self-employed individuals (sole traders or freelancers).
Landlords earning above the qualifying thresholds.
Partnerships (though this will be introduced at a later date).
Potential Challenges:
Change: no one likes change and this is a significant change for many. Paper records will no longer be accepted and digital software will be required.
Learning curve: Some individuals or businesses may find it challenging to switch to new digital tools or get used to submitting quarterly updates.
Software costs: Using MTD-compliant software can involve additional costs, particularly for smaller businesses or those who are used to free or basic solutions.
Ongoing compliance: With quarterly updates and digital record-keeping requirements, there’s more ongoing responsibility to maintain accurate records throughout the year.
In just 8 months MTD for ITSA will be here, starting with those earning over £50,000 in April 2026, and extending to those with income over £30,000 by April 2027. Speak to our team today and let us take care of your MTD compliance for you. Don’t wait until April 2026… act now and give yourself that financial peace of mind.
FAQ
How It Works
- Contact us on 028 9078 8894 or get a quote today.
- Speak to an accountant who cares.
- Accept your tailored proposal.
- Complete our new client identity checks.
- Digitally sign our stand terms of business agreement.
We get straight to work…
Switch Accountants
If you have an existing accountant, don’t worry. We understand that nobody likes change and it is no different when dealing with an accountant or tax adviser. We aim to make the process as simple as possible. We will write to your existing accountant for you, advise them of the change and ask them to provide a copy your latest tax return and accounts information. The switch is dealt with professionally between accountants and is common practice. We are personal in our approach and will look forward to working with you.
New QuickBooks Licence
We will open a new QuickBooks licence for you. We will then connect your business bank account to the software and start bringing your business bookkeeping up to date. You will get access to QuickBooks and a free demo of the package.
Secure Client Portal Access
You will gain access to our secure client portal area which can be used to securely transfer documents directly to us or digitally sign documents and tax returns when completed. We will upload HMRC correspondence directly to the portal for your records.
Making Tax Digital Compliance
We will prepare quarterly MTD returns from your financial records and call you in advance to discuss the results for the quarter before onward submission to HMRC. We will take care of your business finances to ensure compliance with Making Tax Digital.
Pre-Year-End Tax Planning
In January and February we will issue our year-end tax planning checklist. You may wish to consider various tax planning measures such as purchasing new equipment, pension payments or gift aid donations. Should you wish to discuss anything in more detail contact us in advance of year end, 31 March.
Year-End Tax Return Preparation
We will prepare your year-end accounts and tax return for review and discussion in advance of submission to HMRC. Discussions will be held in person, via video call, over the phone or via email, depending on your preference.
Submissions to HMRC
Once digitally signed and approved, we will submit your tax return to HMRC on your behalf. Your completed return will be uploaded to the client portal area for ease of access.
How to Pay
Our preferred method of payment is monthly by direct debit. You will receive a monthly invoice reflective of your agreed package and this will be collected by direct debit. You will be asked to complete the direct debit mandate form as part of the onboarding process. If you would prefer to pay via alternative means, please contact us.
Services
Our bread and butter is…
Landlords & Buy-To-Let property owners
Expert tax advisers to property owners, from 1 rental property to large portfolios, we can assist you with your tax obligations and staying compliant with MTD.
Services
Our bread and butter is…
Sole Traders & Contractors
Let us take on your financial, tax & MTD compliance burdens to allow you to do what you do best… run your business! From farmers, contractors, builders, to beauticians, we can help.
Get in touch
Contact MTD Tax Advisers Today
The Office Dock, Unit 2 Channel Wharf, 21 Old Channel Road, Belfast, BT3 9DE