Making Tax Digital For Income Tax Self-Assessment

Starting on the 6th of April 2024, Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) applies to all self-employed businesses and landlords with a business and/or property income greater than £10,000 per year ...

"MTD for ITSA will apply for tax year 2024/25 and onwards!"

Under MTD for ITSA, you must send HMRC quarterly updates within a month of each quarter's end. You also have to send an end-of-period statement by the 31st of January following the end of the tax year and make a final declaration by the same date. This would be the 31st of January 2026 for the 2024/25 tax year.

You must first choose MTD-compatible software for your bookkeeping and accounting. It must work with MTD for ITSA and be capable of:

- creating and storing digital records of all your business transactions
- sending updates of your total business income and total business expenses to HMRC each quarter
- making an end-of-period statement

If you have more than one business or are, for example, both a self-employed trader and a landlord, you should keep separate records for both and make separate submissions for each of them.

Your software needs to be authorised to make submissions to HMRC and all of the main software providers will let you know how to do this. Of course, Essendon can get this set up for you and/or make the submissions on your behalf.

The quarters will run until the 5th of July, the 5th of October, the 5th of January and the 5th of April each year. Submissions must be made within a month of the end of a quarter. You can change the updates to submit at the end of a calendar quarter if you prefer. If you miss the deadline, you may be charged a penalty.

At the end of the actual tax year, you'll need to make an end-of-period statement via MTD for ITSA. Doing this means you can also:

- make accounting adjustments
- make tax adjustments
- claim reliefs or allowances

The end-of-period statement is where you declare that the information you have provided is complete and correct and that you have finalised your tax position for that tax year.

"This must be submitted by the subsequent 31st of January!"

If your bookkeeping and accounting software isn't Making Tax Digital ready then you'll need to either upgrade or swap to another system as soon as you can to ensure you're ready for MTD for ITSA to start.

If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.