Making Tax Digital for Income Tax (MTD ITSA)

HMRC is changing the way certain individuals report income from self-employment and/or property. This is called Making Tax Digital for Income Tax Self Assessment (MTD ITSA).

Below is a straightforward explanation of what MTD ITSA is, who it applies to, what will change, and how Bexons can support you.

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What is MTD ITSA?

MTD ITSA is a new HMRC regime that will require those within scope to:

  • keep digital records of their self-employment and/or property income, and
  • submit quarterly updates to HMRC (rather than only dealing with everything once a year).

These quarterly updates are summaries of your income and expenses for each period. You will still need to complete the usual year-end finalisation, where the final tax position is confirmed.

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Who does this apply to?

From 6 April 2026, MTD ITSA will apply to individuals with qualifying income over £50,000 per year.

“Qualifying income” generally means the gross income (turnover) from:

  • self-employment (sole trader income), and/or
  • UK property income(rental income), before expenses are deducted.

PAYE/CIS Services

What will change?

Instead of a single annual Self Assessment submission, MTD ITSA introduces a new reporting rhythm:

  • Digital record keeping during the year
  • Four quarterly updates submitted to HMRC
  • A year-end finalisation (to confirm adjustments and the final tax position)

This is a change in how and when information is reported, rather than simply a one-off extra form.

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What does this mean in practice?

Most clients will need to move away from informal record keeping and towards one of the following:

  • bookkeeping software (with bank feeds), or
  • a digital records solution that allows income and expenses to be captured and categorised throughout the year.

Quarterly updates rely on the information being kept up-to-date, so it becomes more important to maintain records regularly rather than leaving everything until the year end.

How Bexons can help

Bexons can support you in different ways depending on how hands-on you want to be. For example:

1) Initial registration and set-up support

Where required, we can help with the initial steps to get you ready for MTD ITSA, including:

  • registering for MTD ITSA when HMRC sign-up opens for your start date,
  • ensuring the MTD ITSA record is set up correctly, and
  • authorising Bexons as your agent (if you want us to submit on your behalf).

2) Ongoing quarterly support

Once set up, you will have ongoing quarterly requirements. Clients typically choose one of the following approaches:

  • Self-managed: you keep records and submit quarterly updates yourself
  • Assisted submission: you keep records and we submit the quarterly updates for you
  • Fully managed: we handle the bookkeeping/quarterly process end-to-end and submit the updates

We will confirm which approach is most suitable for you based on your circumstances, record keeping method, and how much involvement you want.

Next steps

If you think you may be within scope, or you’d like us to confirm your position, please contact us and we can talk you through what applies to you and the best way to prepare.

Contact Bexons

Please get in touch via our contact page or email us with “MTD ITSA” in the subject line.

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