MTD for ITSA: Your questions answered by Rebecca Benneyworth

Accounting professionals across the UK recently joined our webinar, “Making Tax Digital for Income Tax, with expert tax speaker, Rebecca Benneyworth. The session provided clarity on the upcoming MTD requirements and generated dozens of practical questions about implementation, software choices, and client management.

As a practicing accountant, Rebecca has hands-on experience in MTD testing and provided the audience with detailed answers to help attendees prepare for the April 2026 rollout. Here are the key questions and insights from our Q&A session.

Can you manage multiple income sources across different software platforms?

Question: If you’ve got multiple sources of income (e.g., rental management software and income tax in accounting software), can you make updates from both?

Rebecca confirmed that yes, you can use different software platforms for your different income sources. There’s an important requirement: if you have multiple trades, you must submit each trade separately. This means maintaining separate records and submissions for each income stream irrespective of which software platform you choose.

What’s the current status of quarterly return filing?

Question: Have you successfully filed any quarterly returns?

Rebecca has practical experience here, having successfully filed quarterly returns for the previous year and several for the current testing period. She’s used both bridging software and full-function software successfully. In her experience, she noted one limitation: the finalisation process for the previous year hasn’t been fully operational yet, which is part of the ongoing development work.

When will HMRC data be available through the new API?

Question: As part of the new API delivering information from HMRC, when will the numbers be available?

Based on Rebecca’s experience, while nothing came through until late June in previous testing, the expectation is that data will be available immediately once you’ve made your final quarter submission.

Will HMRC tax calculations include payment on account details?

Question: Will the HMRC tax calculation pick up previous payments on account?

Currently, HMRC calculations don’t automatically include payment on account information. The system shows your liability for the year, but practitioners must manually interpret this by accounting for payments already made. Rebecca has suggested to HMRC that this would be a valuable enhancement once the MTD programme is fully established.

How will client sign-off work without traditional tax returns?

Question: If software doesn’t provide tax returns and only HMRC will generate them after all submissions are complete, how do we get clients to sign off on numbers they can’t see?

This is a work-in-progress area. Rebecca explained that all software providers are currently developing solutions for client sign-off processes. Many providers are behind on year-end functionality, so the exact format of client approval documents is still being determined across the industry.

How do joint landlords handle quarterly returns?

Question: How will joint landlords file quarterly returns where only one set of accounts is maintained?

Each person with an obligation must file separately. If you’re using landlord software, it will automatically split the income appropriately. Rebecca particularly recommends considering dedicated landlord software for clients with multiple properties, as it handles these splitting requirements more efficiently.

Are there exemptions from MTD requirements?

Question: Do certain taxpayers qualify for exemptions?

Yes, several exemptions exist:

• Married couples claiming elderly married couples allowance are exempt

• Those eligible for digital exclusion (more details coming this summer)

• Partnerships filing partnership returns are not included

• Foreign residents with UK property income won’t be required to comply in 2026 (though they will need to eventually if over the threshold)

Preparing for MTD for ITSA: Key takeaways and next steps

Making Tax Digital for Income Tax is a significant change for accounting professionals and clients alike, but preparation is key to navigating this transition smoothly.

As the April 2026 rollout approaches, staying informed and proactive will ensure you’re ready to adapt to this new digital era of tax reporting. Keep an eye out for further updates and developments in the coming months!

This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.