The big change
From April 2026, the way many sole traders and landlords report their tax to HMRC will start to change under Making Tax Digital for Income Tax Self-Assessment (MTD ITSA).
Who will be affected and when?
• If your total income from self employment and property is over £50,000, you are expected to come into MTD ITSA from April 2026.
• If it is over £30,000, you will be brought in a year later, from April 2027.
• The government intends to extend this further to those with income over £20,000 from April 2028.
Please note that income from employment, pensions, dividends and most partnership income don’t count towards these limits.
What will change?
If you are within MTD ITSA you will:
• keep your business and property records in a digital format (for example, in accounting software or a suitable app.
• send quarterly updates of your income and expenses to HMRC for each business and property business.
• send a final annual submission through MTD compatible software by 31st January after the tax year, instead of filing your usual online Self-Assessment tax return.
Making Tax Digital is approaching rapidly, we are here to help, call the team at Holmes and Company on 01525 851101 or contact us here
The tax tip is provided for general guidance only; further advice should be sought, for specific issues.
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