Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is HMRC’s second phase of digitalising the UK tax system. It will impact self-employed individuals and landlords with a taxable income above £10,000 from April 2024.
Making Tax Digital was initially launched in April 2019 where VAT registered businesses with earnings above £85,000 are required to submit quarterly updates to HMRC using MTD-compatible software and has subsequently been extended to all VAT registered businesses.
Similar rules will soon apply to landlords and self-employed individuals for income tax purposes who will be required to keep digital records of their income and expenditure on HMRC approved software package.
Those that are impacted will need to send quarterly updates to HMRC, and finalise their income and expenses by submitting an end of period statement (EOPS) for each source of income along with a final declaration.
From April 2024, the deadlines the deadlines for quarterly submissions will be exactly 1 month after the quarterly period and are the same for everyone who has to follow the MTD for ITSA rules. These are:
- 5th August
- 5th November
- 5th February
- 5th May
What is MTD-compatible software?
MTD-compatible software is an accounting and bookkeeping program with API technology that speaks directly to HMRC’s systems.
Free Agent,
QuickBooks, and
Xero are HMRC approved software providers that store MTD for ITSA compliant records of income and expenditure. Users are able to send these records to HMRC straight from their MTD-compatible software.
If you’re self-employed or a landlord and are set to be impacted by MTD for ITSA, our specialist
Cloud Accounting team are available to help you choose a software package that suits your income.
Contact us today to get started.