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If you’re self-employed, we have some good news for you

We start the new year with some good news for all self-employed business owners and landlords. Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) will now start in April 2026 rather than April 2024.

Announced just before Christmas, the Government has decided that as we are facing such challenging economic times and because MTD for ITSA represents such a significant change in how income is reported, it makes sense to delay the phased roll-out. This means people won’t need to invest in MTD-compatible software during a recession and gives HMRC longer to properly test the system and ensure any lessons learnt from last year’s rollout of  MTD for VAT are factored in.

And this delay also comes with some other important changes. Read on to find out what they are and what steps you should really be taking now if you want to make your life (and that of your accountant!) easier in the future.

What are the other changes to MTD for ITSA?

As well as changing the start date, the Government has also made changes to the income bands for the phased roll-out.

Previously, all self-employed business owners and landlords with an annual income over £10,000 were required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software. This has now changed to the following MTD for ITSA roll-out stages:

  • From April‌‌‌ ‌‌2026: all self-employed business owners and landlords with an income of more than £50,000
  • From April 2027: self-employed business owners and landlords with income over £30,000
  • As of yet there is no date as to when MTD for ITSA will apply to general partnerships (previously it was April 2025)

 

The Government is also taking this extra time to review the needs of businesses with income of less than £30,000 as they are likely to find maintaining digital records and using MTD compliant software more challenging than larger companies.

What should you do next?

While many of you may be breathing a sigh of relief that you don’t need to be MTD compliant just yet, we would still recommend you start as soon as possible. After all,  keeping digital records isn’t just about making sure the right information goes to the tax office at the right time. It’s also about:

  • helping you keep better track of your cash flow
  • providing real-time access to your finances
  • reducing the number of mistakes in your data.

 

And, of course, if you do get on top of it now, you will definitely be ready when MTD for ITSA finally happens.

If you’re interested in going digital but aren’t 100% sure where to start, here are some handy tips on choosing the best MTD-compatible software for your business, and, of course, we are always at the end of the phone if you want to chat through your options.

MTD for ITSA

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