MTD for ITSA
(Income Tax Self Assessment)
We are HMRC-recognised for developing MTD Income Tax Self Assessment software.
The key requirement for all businesses falling within the MTD for ITSA regime will be to keep records digitally, make quarterly submissions and complete an annual tax declaration.
HMRC's current MTD timeline requires all self-employed individuals and property landlords with turnover exceeding £50,000 to join MTD for ITSA with effect from 6 April 2026.
How does it work?
As with MTD for VAT, one of the main requirements of MTD for Income Tax is the necessity to keep a digital record of income and expenses. This can still be via a spreadsheet, as long as the data is imported digitally into the software used to send a summary of income and expenses to HMRC.
A summary of income and expenses must be sent to HMRC every three months. Using the information that has been sent, HMRC can then provide an estimate of the tax liability. A final report needs to be sent to HMRC, which confirms the income and expenses of the accounting year. At this point, a claim for allowances and reliefs can also be made and a final tax calculation obtained.
Although there is an obligation to send income and expense information every 3 months, it is possible to send an update to HMRC more often, for example, if a more up-to-date tax estimate is required.
What is TaxCalc doing to support businesses?
We are actively working on new solutions, as recognised by HMRC, as well as evolving our existing ones to make the transition into MTD for ITSA as seamless as possible.
TaxCalc Business Filer is our new MTD for ITSA bridging solution and allows our customers to submit quarterly submissions to HMRC. Those familiar with VAT Filer, our MTD for VAT bridging solution, will recognise the simplicity with which those submissions can be made.
See TaxCalc Business Filer in action
Although Business Filer can ingest data from any spreadsheet, we have produced our own templates for recording transactions and summarising totals as a starting point for anyone that needs them. The totals can then be imported using VAT Filer (for quarterly MTD for VAT submissions) and using Business Filer (for quarterly MTD for ITSA submissions).
If you would like to download these sample spreadsheets then we have these available for free on our Knowledgebase site.
Annual Tax Declaration
If you fall within the MTD for ITSA regime, you will no longer be required to complete the same Self Assessment tax return that you do today. However, you will still be required to submit information annually in order to finalise your tax position and the capability to do that will be included in future versions of TaxCalc.
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