Accountant’s guide: Preparing for Making Tax Digital for ITSA

With the countdown to Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) well underway, and requirements set to take effect from April 2026, making sure both your firm and your clients are MTD-compliant should now be a top priority.

But what can accountants do between now and then to prepare for the transition? In this guide, we’ll cover the key aspects of MTD for ITSA, the challenges you may face, and the steps you need to take to get ready.

What is Making Tax Digital for ITSA?

You probably need no reminder that MTD for ITSA is part of HMRC’s ongoing initiative to modernise the tax system.

Essentially, it means that eligible taxpayers will need to keep digital records of their income and expenses, using MTD-compatible software to maintain and submit those records to HMRC. It’s designed to move towards a more structured, real-time reporting system, rather than working in retrospect, with users submitting quarterly records, along with an annual end of period statement (EOPS) and a final declaration.

Who does Making Tax Digital affect?

MTD for VAT is already in place, applying to VAT-registered businesses, regardless of turnover. From April 2026, MTD for ITSA will be introduced for businesses, self-employed individuals, and landlords with income over £50,000.

Currently, HMRC plans to extend the scheme to those with income over £30,000 from the following year – and has indicated that partnerships and other taxpayers might be brought into the scheme at a later date, too.

What challenges might Making Tax Digital for ITSA bring for accountants?

HMRC’s intention is for MTD to streamline tax reporting – but that doesn’t mean the transition will be without its challenges. Some key things to consider include:

1. Client tech readiness

Assessing clients’ current digital capabilities and providing the necessary training and resources may present its challenges – and supporting the transition to digital record-keeping (as well as making sure your own systems are capable of handling more frequent reporting) will be a key part of the process.

2. Data security and securing the right tech

As with any data transfer process, maintaining robust security measures throughout the transition to MTD is fundamental. Not all accounting software is MTD-compatible, either – which means making sure your clients are using approved software is essential for compliance. Watch out for spreadsheets, too – while clients can still use them, the data they contain must be transmitted with a digital link (usually referred to as bridging software).

3. Continuous education

Successfully embedding new ways of working means making sure the right training and onboarding happens – for your team and your clients. As well as learning how to use MTD-compliant software, you’ll also have to stay updated on HMRC’s guidance, as well as think about reviewing your internal workflows and processes.

Preparing for Making Tax Digital for ITSA: an accountant’s checklist

To mitigate some of the above challenges and make sure you’re ready well ahead of the deadline, take action now. Here’s a handy checklist:

• Invest in technology – If you’re not already using MTD-compliant cloud accounting software, it’s time to start. Make sure your firm and your clients are managing records and submitting reports digitally as soon as possible.

• Communicate with clients – Your clients may know that MTD for ITSA is coming, but might not understand what it means for them. Start talking to them now, letting them know about the changes, their responsibilities, and how they need to prepare.

• Review internal processes – Now is a great time to assess your existing internal workflows. By analysing how things currently work, you’ll have a chance to spot inefficiency, as well as make adjustments to accommodate MTD requirements.

• Think about staff training – Map out how you’ll train your team – making sure they fully understand the process themselves, and are able to confidently guide clients through the transition.

• Stay updated on HMRC guidance – It’s no secret that the MTD timeline has changed, and that the deadlines and specific details continue to evolve. Setting alerts to keep you informed will help you stay ahead of any new developments.

Bright is here to help

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.

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).

Take a look at the MTD Hub to learn more.

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.

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.