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MTD ITSA
What is changing?
Making Tax Digital for Income Tax is a new way in which sole traders (including CIS workers) and landlords will be required to report their tax records to HMRC.
Individuals will be required to submit quarterly tax submissions, and one final return to HMRC via MTD compliant software.
What does this mean for you?
Making Tax Digital for Income Tax will become mandatory in phases:
When you need to start using Making Tax Digital for Income Tax depends on your qualifying income within a tax year. If your qualifying income is over:
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£50,000 for the 2024 to 2025 tax year, you will need to use it from 6 April 2026
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£30,000 for the 2025 to 2026 tax year, you will need to use it from 6 April 2027
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£20,000 for the 2026 to 2027 tax year, the government has set out plans to introduce legislation to lower the qualifying income threshold from 6 April 2028
Your qualifying income is the total income you get in a tax year from self-employment (including CIS) and rental properties. HMRC will assess your total income before you deduct expenses.
Example
For example, your gross income (income before you deduct expenses) could be:
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£25,000 from rental income
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£27,000 from self-employment income (including CIS income)
In this example, your total qualifying income would be £52,000.
You do not need to start using Making Tax Digital for Income Tax until after you have submitted your first Self-Assessment tax return, but you can choose to sign up early.
If you need to use MTD ITSA, you should prepare and be signed up for the service before you need to use it. For example, you will need to choose and authorise your chosen software or decide how your agent will act for you.
How can NASA help?
Our Making Tax Digital accountancy packages streamline HMRC compliance for sole traders and landlords by replacing traditional year-end paperwork with digital record-keeping.
Designed to meet the government's latest regulations, these packages automatically track your business income and expenses throughout the year. Instead of filing a single annual Self-Assessment tax return, the software securely bundles your data into mandatory quarterly updates and submits them directly to HMRC, significantly reducing the risk of errors and late penalties.
Depending on the level of additional support you need throughout the year, we’ll happily match you to a service that best suits your business. Please get in touch with us directly to discuss how we can help.
Our standard MTD package includes the following:
Self-assessment and MTD registration with HMRC
Market Leading MTD Ready Accounting Software
Business Bank Account Recommendation that connects to MTD software
Cloud Based Bookkeeping and Real-Time Financial Insights
Quarterly updates and final declaration submissions
Automated reminders and tax deadline alerts
One-to-one Support from a Dedicated Accountant
Year End Income and Expenditure Accounts
Add ons available – such as additional employee payroll, CIS300 returns and VAT returns
Save Time & Reduce Admin
We handle the calculations and submissions, so you don’t have to.
Tailored to Your Business
Whether you’re a sole trader, subcontractor, or contractor, our service can adapt to your needs.
Expert Support, When You Need It
Your dedicated accountant will be on hand to answer questions and keep your finances running smoothly.
Stay Fully Compliant
Avoid fines and penalties with expert-managed submissions and up-to-date regulatory knowledge.
Improve Cash Flow Visibility
Access real-time reporting and dashboards to make smarter financial decisions.