announced by HMRC Digitization of Taxes (MTD) for Income Tax Self-Assessment (ITSA) Postponed until April 2026. As small businesses, accountants and bookkeepers face difficult times, we understand and support their deferrals from HMRC, giving them more time to prepare.
From this date, landlords and self-employed individuals earning more than £50,000 a year will be required to: MTD rules. Earning Income over £30,000 will enter the MTD from April 2027. This means sending quarterly updates to HMRC via MTD compatible software, and once a year sending the End of Period Statement (EOPS) and Final Declarations.
However, the postponement does not change how we approach future legislation.
We are MTD ready for ITSA and will continue to enhance our services to provide the best possible user experience and provide guidance to accounting partners and small business customers who need support. Preparing for the future of digital taxes.
why did this happen?
As businesses and their advisors face an unprecedented time of turmoil, the postponement of ITSA’s MTD is HMRC’s bid to make the transition as easy as possible for businesses. Regardless of this delay, this is a good thing because it remains an important part of the government’s efforts to digitize the tax process.
In the future, all businesses will have to keep digital records. The change may be overwhelming for those affected, but it promises serious long-term benefits.
From optimizing tedious and time-consuming tasks to improving the efficiency and accuracy of tax processes, small businesses, accountants and bookkeepers should be able to look ahead with optimism. And even if his MTD at ITSA goes a little further than expected, it’s never too early to set the tone by adopting compatible accounting software.
More broadly, enabling small businesses to adopt digital tools prepares them for the challenges ahead.For example, a huge number of Small and medium-sized enterprises If your expenses exceed your income in a given month, you are in a cash flow crisis. Digital tools help small businesses better monitor and get paid mQuickly – A key aspect to managing cash flow.
New MTD on the ITSA timeline
Here are the key dates you need to know when preparing for your ITSA MTD:
- April 2026: ITSA MTD – businesses, self-employed and landlords earning over £50,000.
- April 2027: ITSA MTD – Businesses, self-employed and landlords earning over £30,000.
- Not yet timelined:
- ITSA MTD if your annual income is less than £30,000
- MTD of ITSA for General Partnership
We will continue to work closely with HMRC to support the ITSA’s MTD evolution and support the corporate tax MTD once it becomes mandatory. But most importantly, we are dedicated and ready to provide solutions that meet our clients’ future filing needs and make this journey as smooth as possible.
Check out some of us for more information on the law and how Xero can help our clients comply. MTD for ITSA resources.