MTD ITSA for sole traders and landlords

Making Tax Digital for Income Tax Self Assessment is planned to happen from April 2026 for sole traders and landlords which will quarterly submissions of accounts information to HMRC.

This has been on the cards for several years now and has been continually postponed but HMRC are clear now that this will take effect from April 2026.  HMRC’s intention is “to help businesses get their tax right with mandatory use of digital record keeping and using MTD compatible software”.

So from April 2026 sole traders and landlords with income over £50,000 will be required to comply with Making Tax Digital for Income Tax Self Assessment (MTD for ITSA).  It will apply to those with income over £30,000 from April 2027.

What does this mean for you?

If you are a sole trader or a landlord who has income over £50,000 you will be required to maintain your accounting records on software which can submit returns quarterly to HMRC.  This is digital record keeping and will require you to store your supporting documents digitally too, either within that software or externally.

It does mean you will need to keep your accounts up to date on a regular basis on software which is compatible with MTD ITSA so that the quarterly submission is accurate and not missing loads of income or expense information.

Your online tax record will show these submissions and should give you an indication of the tax due for each period so at year end you should haven’t too much of a surprise at the tax to pay.

If you are VAT registered you will already be submitting quarterly returns for VAT so this will just be an additional return for you. 

If you are not VAT registered you will have a deadline for this submission which is to be confirmed but will either be the end of the month following the quarter end or, as with VAT returns, the end of the month following the quarter end plus 7 days.

How will it work?

Once your quarterly accounts are complete a submission can be made to HMRC.  Submissions will be for the quarters April to June, July to September, October to December and January to March.  There will be a 5th submission after your year end to make any adjustments needed to your final accounts and this will feed through against the 4 submissions already made.

All sole traders and landlords have annual reporting requirements to 5th April (or 31st March) each year hence the quarterly returns tie in with these dates.

How can we help?

We have been providing bookkeeping support to businesses for many years and use digital record keeping for all those businesses.  We can support you if you need to get your accounts organised and ready for those quarterly submissions from April 2026.  The Xero software we use will have the functionality to submit quarterly returns.

However if you would like our help to get your organised and ready for this change to accounting reporting don’t leave it until April 2026.  Get organised now or from April 2025 so that you are ready for the MTD ITSA introduction.

If we can help you please get in touch as soon as possible so we can have your accounts prepared well in advance of the deadline.

Give our bookkeepers a call on 01722 341820 if you would like us to support you with this significant change.