Making Tax Digital for Income Tax Self Assessment (MTD ITSA) will require sole trade businesses and landlords with qualifying income over a certain threshold to maintain digital records and update HM Revenue & Customs each quarter using compatible software.
If your total income (not profit) from either or both (combined) of the above sources exceeds the following amounts, you will be caught:
- £50,000 (based on your 2024/25 Tax Return) – MTD ITSA is mandatory from 6 April 2026
- £30,000 (based on your 2025/26 Tax Return) – MTD ITSA is mandatory from 6 April 2027
- £20,000 (based on your 2026/27 Tax Return) – MTD ITSA is mandatory from 6 April 2028
MTD ITSA has been planned for a number of years, and we consistently receive new information from HM Revenue & Customs about how this will work. As recently as Rachel Reeves’s 2025 Spring Statement, we received new information regarding thresholds, exemptions, and other areas.
We will continue to monitor the situation and contact our clients if significant changes affect their tax affairs. You are likely to receive notification from HM Revenue & Customs on this matter as well.
If you have any queries in respect of the above, please do not hesitate to contact our Tax Department or myself and we will be happy to answer any of your questions.
Disclaimer
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.