Making Tax Digital for Income Tax (MTD for ITSA)
Big changes are coming for sole traders and landlords in the UK. Making Tax Digital for Income Tax (MTD for ITSA) will change how you keep and submit your financial records to HMRC.
Not everyone is affected straight away, so this page will break it down for you—what’s changing, who it affects, and what you need to do next.
What is Making Tax Digital for Income Tax (MTD for ITSA)?
Right now, if you have property or sole trader taxable income over £1,000, you submit a yearly Self-Assessment tax return to HMRC.
Under MTD for ITSA, affected sole traders and landlords will need to:
✅ Keep digital records of income and expenses
✅ Submit quarterly returns to HMRC using approved software
Who is affected by Making Tax Digital for Income Tax?
MTD for ITSA will be introduced in three phases:
- From April 2026 – Sole traders and landlords earning over £50,000
- From April 2027 – Sole traders and landlords earning over £30,000
- From April 2028 – Sole traders and landlords earning over £20,000
From April 2025, HMRC will start writing to businesses with 2024 income over £50,000 to prepare them for the transition.
What does Making Tax Digital mean for you?
Quarterly Returns
If you fall under MTD, you’ll need to submit four quarterly updates with income and expenses:
📅 Quarterly Reporting Deadlines (for businesses with a 5th April year-end):
- 6 April – 5 July (Due 7 August)
- 6 July – 5 October (Due 7 November)
- 6 October – 5 January (Due 7 February)
- 6 January – 5 April (Due 7 May)
After these, you’ll submit one final declaration including any additional income.
Keeping Digital Records
You’ll need to use MTD-compliant software to track your income and expenses. HMRC provides a list of recommended providers here.
💡 Even without MTD, keeping up-to-date digital records on software is always something I would recommend
Pros & Cons of MTD for Sole Traders & Landlords
✅ Advantages:
✔ Track profits in real time with quarterly updates
✔ Get a clearer idea of your tax bill throughout the year
✔ Stay on top of bookkeeping, reducing last-minute tax return stress
❌ Disadvantages:
✘ More admin to keep up-to-date records and submit on time
✘ Learning the process (or hiring an accountant) could increase costs
What should you do next?
MTD for ITSA could be the biggest change to tax reporting since Self-Assessment launched in 1996. As you will see above, it’s not all bad. Better record-keeping means better financial planning for your business.
If you want to get ahead and ensure you’re compliant, I’m here to help!
💬 Need advice on MTD and how Every Cloud can support you? Book in a discovery call below, and we can have a chat.
I would like to share what a pleasure it ha been working with Tom at Every Cloud Accounting. Tom is great to work with. He covers the detail and explained things in a clear and precise manner that even l could understand. Always friendly and helpful. I look forward to working with Tom again in 2025.Patrick Harrigan
I would recommend Tom Smith to anyone who would require some advice and help in sorting out their yearly tax forms. He is very approachable, quick to reply to any queries you may have and adaptable to work with people's different financial capabilities allowing a person peace of mind.
I am very much enjoying working with Every Cloud. Tom has been very helpful with my new business and I look forward to moving the business forward with Every Cloud’s help.
Tom offers a great service, as a new business and no previous experience Tom has helped me every step of the way no matter how basic the question is! Always happy to explain and talk me through any issue`s, systems or questions I may have, just a great service in every way!
I booked in for a 'power hour' session with Tom as being a relatively new business there are so many elements of accounting that are confusing and can leave you feeling a bit unsure how to move forward. The session with Tom was so helpful and exceeded my expectations - we managed to address so many different areas within the hour and put to rest things that I had been struggling with for some time. This gave me peace of mind and supported a clearer avenue forward with my accounting and tax. Tom has a really personable and down to earth style when giving explanations and advice, making conversations with him really easy to understand. He really understood my concerns and tailored his focus and advice to my business circumstances. I would highly recommended Tom and wouldnt hesitate to book in with him again for further support as my business grows.
I have been using Every Cloud Accounting for almost a year now. I had previously been using a large online company who weren't giving me the support I needed as a first time business owner. This is where Tom is amazing . His approachable helpful style takes away that barrier to not ask questions. He's always happy to explore new ways to help my business and always happy to explain my account submissions. He's an asset to my business and could not recommend enough.
Excellent personalised service was what attracted me and has turned me into a customer. Felt like my needs were listened to, excellent customer service!
Tom is a great accountant. Very down to earth and easy to ask questions of.Professional and knows his stuff!If you are looking for an accountant I would definitely suggest you give him a call.Reliable, honest and easy to communicate with.
I wasn't sure if I needed to speak to an accountant, but having decided to contact Tom I'm so glad I did.I was worried my questions might be too basic but he was so helpful, and gave me tips about using the Government Gateway so it no longer seem so overwhelming.You don't need to earn a big income to find an accountant helpful!I have now done a couple of things with HMRC to ensure my self assesment will be more straight forward and less daunting.If you are thinking of contacting Tom, I can't recommend him highly enough.A very knowledgeable and patient accountant - so good at explaining the whole process!
Tom at Every Cloud Accounting is simply brilliant. He is really easy to work with, and doesn't bamboozle us with a million questions - he does his job brilliantly whilst leaving us to run our business. I have worked with countless accountants over the years and Tom is the first one that I have actually enjoyed working with! In just six months he has set us up on QuickBooks and Dext, has produced a three year financial forecast for a funding application and offered us advice on tax and dividends - all whilst keeping up with our book keeping and VAT returns. I would recommend Tom to anyone looking for an approachable, friendly and professional accountant.
Tom has always provided an efficient service, and provided me with timely advice on tax matters for my consultancy business. I wouldn’t hesitate in recommending him.
Big thanks Tom for helping out with all my Tax returns. You made the process easy to understand, quick, and and I fell it was good value for money. All the best, and thanks again for your help.
Very friendly, reliable and relaxed. Easiest accountant I've dealt with by a mile. Thank you Tom.
Can't recommend Every Cloud highly enough! Tom is a great accountant, and also makes us comfortable and confident in all he does. Highly recommend!
Under very difficult circumstances Tom has worked with one of my clients to change accounting software and install cloud based system. He handled every aspect of the project in a very professional, logical a thorough manner. We now have a more efficient method of working with visibilityThanks TomWould use him again and recommend his services
I would like to share what a pleasure it ha been working with Tom at Every Cloud Accounting. Tom is great to work with. He covers the detail and explained things in a clear and precise manner that even l could understand. Always friendly and helpful. I look forward to working with Tom again in 2025.Patrick Harrigan
I would recommend Tom Smith to anyone who would require some advice and help in sorting out their yearly tax forms. He is very approachable, quick to reply to any queries you may have and adaptable to work with people's different financial capabilities allowing a person peace of mind.
I am very much enjoying working with Every Cloud. Tom has been very helpful with my new business and I look forward to moving the business forward with Every Cloud’s help.
Tom offers a great service, as a new business and no previous experience Tom has helped me every step of the way no matter how basic the question is! Always happy to explain and talk me through any issue`s, systems or questions I may have, just a great service in every way!
I booked in for a 'power hour' session with Tom as being a relatively new business there are so many elements of accounting that are confusing and can leave you feeling a bit unsure how to move forward. The session with Tom was so helpful and exceeded my expectations - we managed to address so many different areas within the hour and put to rest things that I had been struggling with for some time. This gave me peace of mind and supported a clearer avenue forward with my accounting and tax. Tom has a really personable and down to earth style when giving explanations and advice, making conversations with him really easy to understand. He really understood my concerns and tailored his focus and advice to my business circumstances. I would highly recommended Tom and wouldnt hesitate to book in with him again for further support as my business grows.
I have been using Every Cloud Accounting for almost a year now. I had previously been using a large online company who weren't giving me the support I needed as a first time business owner. This is where Tom is amazing . His approachable helpful style takes away that barrier to not ask questions. He's always happy to explore new ways to help my business and always happy to explain my account submissions. He's an asset to my business and could not recommend enough.
Excellent personalised service was what attracted me and has turned me into a customer. Felt like my needs were listened to, excellent customer service!
Tom is a great accountant. Very down to earth and easy to ask questions of.Professional and knows his stuff!If you are looking for an accountant I would definitely suggest you give him a call.Reliable, honest and easy to communicate with.
I wasn't sure if I needed to speak to an accountant, but having decided to contact Tom I'm so glad I did.I was worried my questions might be too basic but he was so helpful, and gave me tips about using the Government Gateway so it no longer seem so overwhelming.You don't need to earn a big income to find an accountant helpful!I have now done a couple of things with HMRC to ensure my self assesment will be more straight forward and less daunting.If you are thinking of contacting Tom, I can't recommend him highly enough.A very knowledgeable and patient accountant - so good at explaining the whole process!
Tom at Every Cloud Accounting is simply brilliant. He is really easy to work with, and doesn't bamboozle us with a million questions - he does his job brilliantly whilst leaving us to run our business. I have worked with countless accountants over the years and Tom is the first one that I have actually enjoyed working with! In just six months he has set us up on QuickBooks and Dext, has produced a three year financial forecast for a funding application and offered us advice on tax and dividends - all whilst keeping up with our book keeping and VAT returns. I would recommend Tom to anyone looking for an approachable, friendly and professional accountant.
Tom has always provided an efficient service, and provided me with timely advice on tax matters for my consultancy business. I wouldn’t hesitate in recommending him.
Big thanks Tom for helping out with all my Tax returns. You made the process easy to understand, quick, and and I fell it was good value for money. All the best, and thanks again for your help.
Very friendly, reliable and relaxed. Easiest accountant I've dealt with by a mile. Thank you Tom.
Can't recommend Every Cloud highly enough! Tom is a great accountant, and also makes us comfortable and confident in all he does. Highly recommend!
Under very difficult circumstances Tom has worked with one of my clients to change accounting software and install cloud based system. He handled every aspect of the project in a very professional, logical a thorough manner. We now have a more efficient method of working with visibilityThanks TomWould use him again and recommend his services
