Email:  office@mwatsonaccountancy.co.uk           Telephone/WhatsApp:    07491 044688

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) was first announced in 2015 and has since been postponed several times. It is now scheduled to launch in April 2026. M Watson Accountancy Services is already well prepared for this upcoming change.

As MTD for ITSA approaches, I will continue to work closely with my software providers and clients to ensure a smooth and fully compliant transition.

MTD transition criteria will be based on your 2024/2025 Tax Return figures and determined by your total Self-Employed Income and Rental Income. If your combined gross income from these sources is £50,000 or more, you will need to enrol for MTD from April 2026.

MTD does not currently apply to Partnerships, but it will apply to individual partners if they have Self-Employed or Rental Income outside of the Partnership.

MTD does not currently apply to other individuals (for example, Company Directors) but it will apply if they have Self-Employed or Rental Income outside of the Directorship.

MTD does not currently affect Limited Companies.

MTD criteria will extend to those earning over £30,000 gross, based on the 2025/2026 Tax Return.

MTD criteria will extend further to those earning over £20,000 gross, based on the 2026/2027 Tax Return.

If you are required to join MTD, you must submit quarterly updates to HMRC using MTD-compatible software by the following deadlines:

• You must maintain digital records of your income and expenses - at the very least in a spreadsheet format, which can be uploaded through “bridging software.”
• If I am filing for you, I can provide recommended spreadsheet templates in due course.
• I can also take care of your quarterly submissions, following agreement of updated terms of business.
• If you already use your own accounting software, it is likely this will include built-in MTD filing capabilities.
• The requirement to file an annual Year-End Tax Return remains unchanged - this must still be submitted by 31st January following the end of the tax year.
• HMRC will introduce a new points-based penalty system for late or missed submissions.
  

Over recent years, I had already begun preparing for MTD, as it was initially expected to go live earlier.

If I handle your bookkeeping and quarterly MTD updates, then you are already set to go. For all others;

• I have invested in receipt-scanning equipment and intelligent accounting software, which some clients are already familiar with from their VAT submissions.
• If you prefer to continue maintaining your own bookkeeping, but would like me to file for you, you will need to ensure you use at least a spreadsheet that can be imported into my bridging software. I can provide compatible spreadsheet templates developed by my software providers, which you can email to me quarterly.
  
• I have already categorised all clients into those who will be affected at the outset, and those likely to be affected in 2027 and 2028. I will continue to monitor and update these categories accordingly.
• I will be working closely with all affected clients to ensure a smooth transition and full compliance with the MTD requirements.
• My Agent Services Account (ASA) is fully active and ready for MTD reporting. Your existing tax agent authority with me will be transferred to this system in preparation. Please note: HMRC has assured agents that this setup will not affect clients who are not yet required to join MTD - it simply allows agents to prepare in advance.

Disclaimer
This information is provided for general guidance only and is correct to the best of my knowledge at the time of publication. Tax legislation and HMRC guidance on Making Tax Digital for Income Tax are still subject to change, and individual circumstances can vary. No responsibility can be accepted for any loss arising from action taken or refrained from based on the information above. Please seek professional advice before making decisions relating to MTD compliance.