Guide to Making Tax Digital for Income Tax Self-Assessment UPDATED

Published 19th December 2022

First Secretary to the Treasury issued a written statement confirming the changes at lunchtime on Monday 19 December.

A summary of the changes is as follows:

What is Making Tax Digital for ITSA and do I fit?

Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) is the next stage in HMRC’s plan to modernise the UK tax system, making it easier for people to get their tax right. It means individuals and businesses will need to use MTD-compatible software to keep digital records and submit return.

You will be mandated to report your income and expenses via MTD for ITSA if you are self-employed or a property landlord with total combined turnover from all businesses exceeding £10,000 per year. For example, if you have self-employed income of £6,000 and property income of £5,000, these combined exceed the £10,000 threshold, so MTD for ITSA requirements will apply.

HMRC will look at your income from tax years ending 5 April 2022 and 5 April 2023 to determine whether you fall into MTD for ITSA. If either of these years show business profits exceeding £10,000, you will fall into the scope of MTD for ITSA and will need to start reporting your income digitally from 6 April 2024.

What are the main changes to the submission requirements?

If you fit this criteria, for each business, you will have to:

These quarterly submissions are in line with the tax year. All businesses will have to report for these quarters regardless of their accounting period end.

Challenges you may face with MTD

Watch our recent webinar on MTD for ITSA presented by our Cloud Accounting Manager Mark Whitehead

How we can help

Get in touch with one of our experts, to talk through how we can help you with Making Tax Digital.

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