MTD for Income Tax, handled from digital records to final declaration.
Making Tax Digital for Income Tax is now live for sole traders and landlords with qualifying income over £50,000. Bright covers the full MTD cycle for your practice: quarterly updates, the final declaration and the extra workload in between, whatever records your clients keep.
Quarterly updates for every client type: BrightBooks handles quarterly updates for clients who keep cloud bookkeeping, spreadsheets via bridging, bank records, or paper records.
One final declaration, however clients file: BrightTax retrieves quarterly data directly from HMRC, so clients can use whichever quarterly filing solution best meets their needs.
Quarterly deadlines, under control: BrightManager automates quarterly tasks and records requests across your clients. Coming soon, it will pull each client’s income streams and quarterly update status from HMRC’s records.
What Making Tax Digital for Income Tax requires
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) requires UK self-employed individuals and landlords above the income threshold to keep digital records, send quarterly updates to HMRC and submit a final declaration each tax year, using HMRC recognised MTD software.
Digital record keeping
Each income and expense transaction must be recorded digitally, with its date, amount and category, in records that can be filed with HMRC through MTD-recognised software. Paper invoices and receipts need to be recorded digitally and your clients must also keep their original records or copies, such as invoices and bank statements, as they do for Self Assessment today for at least five years after the 31 January submission deadline.
Spreadsheets are allowed
Clients who don’t use bookkeeping software can keep records in spreadsheets, as long as they connect to HMRC through an MTD-recognised bridging software.
Quarterly updates
Summaries of income and expenses sent to HMRC every three months. They are not tax calculations - they give HMRC an in-year view of the business. Each update is cumulative, covering the tax year from the 6th of April to the end of the update period. HMRC receives category totals, not individual receipts or invoices, and no accounting or tax adjustments are needed before sending.
Final declaration
After the fourth quarterly update, you make any adjustments for your client and claim reliefs and allowances on their business income. You then add their other income and gains or losses, check the tax calculation, and submit their tax return using your MTD year end software by 31 January after the tax year ends.
Who MTD for Income Tax applies to, and when
MTD for Income Tax is being introduced in phases, based on qualifying income - the combined gross income from self-employment and property.
2026From 6 April
Qualifying income over £50,000 in 2024/25 tax year.
2027From 6 AprilNEXT
Qualifying income over £30,000 in 2025/26 tax year.
2028From 6 AprilNEXT
Qualifying income over £20,000 in 2026/27 tax year.
Each phase brings more of your self-employed and landlord clients into quarterly reporting, so sort clients by cohort now and plan the workload.
Quarterly updates for every client, whatever records they keep
BrightBooks is our comprehensive accounting/record keeping tool. The MTD edition specifically deals with MTD for Income Tax bookkeeping for your self-employed and landlord clients - from shoebox record-keepers to cloud-first businesses.
Any starting point
Clients keep full bookkeeping in BrightBooks.
Use our Excel templates with the bridging tool.
Bring in bank transactions through a bank feed or CSV upload.
Photograph receipts and invoices on their phone or forward them by email. VAT is split during processing, with the details extracted ready for you to review.
Quarterly updates sent to HMRC
Generate, review and submit each update from BrightBooks.
Shared access means less waiting
Clients use BrightBooks directly, so you can see their records rather than waiting for them to send them over.
One final declaration, however your clients file quarterly
BrightTax handles the MTD for Income Tax final declaration. It retrieves the quarterly data your clients have already sent to HMRC, so they don’t need to change bookkeeping software for you to file.
Quarterly updates submitted from any MTD software
BrightBooks, Excel via bridging software, Xero, QuickBooks, Sage, FreeAgent and more.
Adjustments, other income and reliefs
Make year-end adjustments and add other taxable income and reliefs before you submit. With full personal tax coverage.
Form-guided checks
Form-guided data entry, error-reduction checks and a full calculation to compare with HMRC’s before the final submission.
Four quarterly updates, with the workload managed in one place
MTD for Income Tax multiplies deadlines and client contact. BrightManager is your MTD command centre, helping you manage the extra workload, so you know what’s due, when it’s due and what stage each client is at.
MTD clients in bulk
Tag clients by MTD qualifying year (the £50,000, £30,000 and £20,000 cohorts), turn MTD services on and update assignees in one bulk edit, with a preview before you apply.
MTD task templates
Tasks created from each client’s MTD deadlines and assigned to the right person.
Automated records requests
Sent to clients a set number of days after each quarter ends.
Coming soon
BrightManager will connect to HMRC and pull each client’s income streams and quarterly update status straight from HMRC’s records.
MTD for Income Tax bundle pricing for your ITSA clients
Choose the combination your practice needs - quarterly updates, final declarations, practice management, or all three.
£4.75
Per client per month
BrightBooks for MTD for ITSA: for non-VAT-registered sole traders and landlords, from £4.75 per client per month, reducing as your ITSA client base grows.
MTD for Income Tax guides and resources
Practical help for your practice and your clients.
Guide: adapt your pricing models so MTD work stays profitable.
Video: MTD explained in under five minutes - ready to share with clients.
Checklist: a step-by-step guide to moving clients to MTD for Income Tax.
Client FAQs: plain-English answers to the questions clients ask, based on HMRC guidance.
Letter templates: pre-written letters to tell clients what MTD means for them.
MTD for Income Tax: frequently asked questions
What is MTD for Income Tax?
What is MTD for Income Tax?
Who has to follow MTD for Income Tax, and when?
Who has to follow MTD for Income Tax, and when?
Can clients use spreadsheets for MTD for Income Tax?
Can clients use spreadsheets for MTD for Income Tax?
What does Bright offer for MTD for Income Tax?
What does Bright offer for MTD for Income Tax?
Do my clients have to switch to BrightBooks?
Do my clients have to switch to BrightBooks?
How much does it cost?
How much does it cost?
Get your practice ready for every MTD for Income Tax phase
Book a demo to see quarterly updates, the final declaration and MTD workflows working together, or talk to our team about bundle pricing for your ITSA clients.