Making Tax Digital (MTD) for Income Tax and Self Assessment (ITSA)

The UK government is introducing Making Tax Digital (MTD) for Income Tax and Self Assessment (ITSA) to modernise the tax system. Starting from April 2026, sole traders, the self employed and landlords earning over £50,000 will need to keep digital tax records and submit updates every three months instead of annually. In April 2027, this will apply to sole traders, the self employed and landlords earning over £30,000. The goal is to reduce errors and simplify tax management, making it easier to stay compliant. Exemptions exist only for those who can't use digital systems due to specific circumstances. The government has not announced a date yet to introduce Making Tax Digital (MTD) for Income Tax and Self Assessment (ITSA) for partnerships.

Xero is the perfect solution to simplify the transition. Xero is fully MTD-compliant and helps you manage your finances in one place. With features like automated invoicing, expense tracking, and real-time financial insights, Xero makes it easy to maintain digital records. It’s an all-in-one tool that keeps your business running smoothly.

We can help you with the transition. Just get in touch with us for a chat.

For more details on MTD for ITSA, visit this link.