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We’ve created a resource pack for accountants to take the strain out of digital transition.
The basics
What is MTD for ITSA?
Making Tax Digital is a HMRC initiative to modernise how taxpayers submit their VAT and self assessment data. Businesses must transition from paper record-keeping and manual submissions into a digital workflow. HMRC-approved software is needed to comply with tax filing rules and simplify reporting.
Digital transformation aims to:
- Reduce the likelihood of errors caused by manual submissions
- Streamline the tax process for HMRC and taxpayers alike
- Allow businesses to keep a more accurate and up-to-date record of their finances
Affected clients
Who’ll be included?
MTD for ITSA applies to taxpayers with sole trade or property income above the HMRC threshold. The initiative is being introduced in phases, ensuring a smoother transition for affected individuals.
The phased rollout means:
- From April 2026, taxpayers with an income over £50,000 must comply
- From April 2027, those earning over £30,000 will be included
- From April 2028, those earning over £20,000 will be included
MTD Timeline
2015
Making Tax Digital initiative announced at Budget 2015 for businesses, self-employed individuals and landlords
April 2026
Self-employed individuals and landlords (income from which is over £50,000) join
April 2028
Self-employed individuals and landlords (income from which is over £20,000) join
2025
Income Tax Public Pilot begins to test and develop the service with voluntary submissions.
April 2027
Self-employed individuals and landlords (income from which is over £30,000) join
On-demand webinar
Getting to grips with digital tax
Join Jade and Joe as they walk through a detailed outline of the current state of MTD and how to prepare your business.
- What is Making Tax Digital (MTD)?
- Objectives of MTD according to HMRC
- Public concerns and feedback
- MTD resources
Helping you
Featured resources
Video: MTD explained
Get MTD explained in under 5 minutes with our simple to follow video, perfect to share with clients or your team.
Your MTD checklist
This checklist is an essential resource for accountants and tax professionals, giving you a structured guide to transition your clients to MTD for ITSA.
FAQs: Key answers to client questions
Get an easy-to-read guide to answer your clients questions using HMRC information, including explanations of quarterly updates, final submissions, and more.
Easy comms: Prewritten letters
Download our prewritten letter templates to save time when communicating with your clients about MTD.
Download all of these resources
All of these resources are available as a single download for you to save and use as you onboard clients to Making Tax Digital.
What you need to know
MTD for Income Tax requirements
- Digital record keeping
- Using spreadsheets
- Types of digital record
- Quarterly updates
- Self assessment tax return
Digital record-keeping
Keeping digital records means your clients’ income and expenses are recorded in a format that can be transferred to their self assessment updates and annual return without typing the data directly into the income tax form.
The records could be kept in bookkeeping software, or in an Excel spreadsheet.
Using spreadsheets
Using spreadsheets for Making Tax Digital (MTD) for Income Tax can be an effective solution for clients who don’t want bookkeeping software. But remember, you’ll need bridging software to connect spreadsheets to HMRC’s systems and ensure your compliance with MTD requirements.
Types of digital record
For Making Tax Digital (MTD), your clients need to keep digital records of all income and expenses, including sales invoices, receipts, and bank statements. Any other financial information that supports the figures reported to HMRC should also be stored digitally to maintain compliance and accuracy.
Quarterly updates
Quarterly updates for Making Tax Digital (MTD) involve submitting income and expense information to HMRC every three months. Accountants must compile totals and use approved software for submission. This ensures that tax calculations are current and align with HMRC requirements.
Self assessment tax return
At the end of the year you’ll need to submit the End of Year Final Declaration. You’ll confirm and adjust income and expenses, and include corrections or additional information. Then, HMRC can calculate the final tax liability for the year.
Regular updates
Quarterly updates in Making Tax Digital
Quarterly updates for Making Tax Digital means your clients need to submit income and expense information to HMRC more regularly to ensure that tax calculations remain accurate and up to date throughout the year. You’ll need to use software to submit the updates, which also keep clients informed about their tax position and avoid any surprises at year-end.
Final submission
End of year final declaration
The final submission in Making Tax Digital for ITSA is the End of Year Final Declaration. It’s submitted at the end of the tax year to confirm and adjust income and expenses, and includes corrections or additional information not submitted in the quarterly updates. The final declaration means HMRC can calculate the final tax liability for the year.
More resources
Resource pack
Get MTD resources to save and share
At Bright, we’re committed to supporting accountants, not adding to their workload. That’s why we’ve created a set of practical, time-saving resources designed to help you educate and onboard your clients for Making Tax Digital for Income Tax Self Assessment (MTD for ITSA).
We understand that getting clients up to speed with MTD requirements can feel like a drain on your time – especially when you’d rather be focusing on profitable, advisory work. These resources are here to take the pressure off.
Because when your clients are prepared, your practice runs smoother, and you stay focused on the work that truly adds value.
