MTD Self Assessment: Changes to Making Tax Digital

If you’re self-employed or earning income from property, the words Making Tax Digital (or MTD Self Assessment) might already be on your radar, and if not, they soon will be.

The way you report your income to HMRC is changing, and it’s one of the biggest tax shake-ups in decades.

MTD for Income Tax Self Assessment (MTD for ITSA) aims to make tax reporting simpler, more accurate, and more efficient by moving everything online.

But for many sole traders and landlords, it also means a significant shift in how you handle your financial admin.

Let’s break down what’s changing, when it’s happening, who it affects, and, most importantly, how you can prepare for it without stress.

What Is MTD Self Assessment?

MTD Self Assessment is part of the UK government’s wider Making Tax Digital initiative; a long-term plan to modernise the tax system. The goal is to reduce errors, improve efficiency, and help taxpayers stay on top of their obligations throughout the year.

Right now, most self-employed individuals and landlords submit one annual tax return. You gather up all your income and expenses, calculate your tax, and submit it to HMRC by the 31 January deadline.

Under MTD for ITSA, that process becomes digital and quarterly. Instead of submitting one yearly return, you’ll send four quarterly updates showing your income and expenses, plus a Final Declaration at the end of the year confirming your total income and tax due.

MTD for ITSA - 6wands Accountancy

Who Does MTD for ITSA Affect?

Not everyone will need to switch right away, but if you fall into any of the following categories, it’s time to get ready:

  • Sole traders with annual business income over the MTD threshold.

  • Landlords with rental income over the threshold.

  • Those with both self-employment and property income combined above the limit.

When Do the Changes Take Effect?

The rollout will be phased, giving different income groups time to adapt.

Here’s how the timeline currently looks:

  • From April 2026: MTD for ITSA will apply to those with annual income over £50,000.

  • From April 2027: it will extend to those earning over £30,000.

  • From April 2028 (subject to final confirmation): it’s expected to apply to anyone earning over £20,000.

If your total self-employment and property income is below £20,000, you won’t need to join MTD for now, though this could change in future years.

What’s Actually Changing and How to Prepare Now

The key difference between traditional Self Assessment and MTD Self Assessment lies in how and when you report your income.

Here’s what you can expect under MTD for ITSA:

Quarterly submissions: You’ll submit digital income and expense updates to HMRC every three months, rather than one big annual return.

Digital record-keeping: You must keep records in a digital format using MTD-compatible software such as Xero, QuickBooks, or FreeAgent.

Final Declaration: At the end of the tax year, you’ll send a Final Declaration confirming your total income and claiming any reliefs or adjustments.

No more manual spreadsheets (alone): Spreadsheets can only be used if they connect directly to HMRC through bridging software.

Seek professional support: If managing your submissions feels overwhelming, get help from an accountant or digital tax specialist.

Speak To The Experts On MTD Self Assessment

At 6wands, we make your move to MTD Self Assessment seamless and stress-free. Whether you’re a sole trader just getting started or a landlord managing multiple properties, we tailor our support to fit your needs.

We begin by setting you up with the right software, recommending and installing MTD-compatible systems that make reporting effortless. From there, we can manage your quarterly submissions and Final Declaration to ensure you never miss a deadline.

Are you prepared for the new changes? Stay compliant without the hassle and contact us today at 0121 550 0221 or email info@6wands.com

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