MTD is now the only method you can use for VAT returns (MTD for VAT) and from April 2026 this will begin to apply to Income Tax Self Assessments (MTD for ITSA).
MTD for ITSA is the roll-out of Making Tax Digital for people who use self-assessment to file and submit tax returns.
HMRC has announced that MTD for ITSA has been delayed until April 2026. It applies to unincorporated / sole trader businesses and landlords with a total business or property income above £50,000 per year. (If you own multiple businesses, the income from all of them contributes to the £50,000 threshold). Those earning an income over £30,000 will come into MTD for ITSA from April 2027.
This means that accounting records relating to income tax must be held digitally within MTD compatible software. There’s a wide range of HMRC MTD compatible software available from a variety of providers. One of which is our IRIS KashFlow software which we discuss in more detail further down this page.
If you currently keep your accounts using spreadsheets, ledger books, etc. now is the time to start recording your accounts digitally.
Here is the new MTD ITSA timeline, when preparing for MTD for ITSA:
April 2026: Unincorporated / sole trader businesses and landlords with an annual income over £50,000.
April 2027: Unincorporated / sole trader businesses and landlords with an annual income over £30,000.
No current timescales: MTD for ITSA for those with annual income under £30,000 annually. MTD for ITSA for General Partnerships.
IRIS Software Group continues to work with HMRC to support MTD for ITSA as it evolves. IRIS Software Group is committed to providing you with a full solution to meet your future needs.
From April 2026, instead of sending one submission each year, you will need to submit quarterly updates about your business income and expenses (you can submit more frequently if you want to). You will also need to send an end of period statement (EOPS) and a final declaration at the end of the tax year.
We are enhancing IRIS KashFlow to support MTD for ITSA including tax calculations, a customisable periodic update report, and submission reminder emails and logs.
Our MTD ITSA software will have an end-to-end solution well ahead of the April 2026 deadline. Once MTD for ITSA is live in 2026, you will be able to submit all 6 returns with confidence and accuracy.
In the meantime, you can continue using IRIS KashFlow to record your accounts. If you’re new to our accounting software, why not start a free trial.
If you are an Accountant, IRIS KashFlow Connect will be enhanced to flag ITSA registered users so that you can give your clients the support they need.
You can only opt out if you are digitally exempt. You can request to be made exempt using the form on the government website.
At the moment, you can only sign up to HMRC’s pilot scheme. We will provide further information when it’s possible to sign up directly.
Get ahead of MTD for ITSA and start recording your online accounts now. It’s quick and easy to sign up and we’ll help you get started.
