Make sure you're ready for MTD for ITSA before the April 2026 deadline by trialling landlord accounting software like Landlord Studio today.
Written by
Ben Luxon
PUBLISHED ON
28
Aug
2024
Making Tax Digital for Income Tax Self Assessments (MTD for ITSA) has faced numerous delays, the most recent being announced on the 20th of December 2022 where the HMRC announced that the implementation of MTD has been pushed back again. MTD is now set to be phased in from the 6th of April 2026.
In the first year, sole traders and landlords with an overall income of over £50,000 will need to make a dramatic change to how they keep their financial records and the tools they use. It means keeping up-to-date and accurate financial records in digital format throughout the tax year as landlords will be required to submit both quarterly summary updates of business income and expenditure to HMRC along with a final end-of-year summary.
In order to stay compliant with these upcoming MTD for ITSA changes, you will need to use MTD-compatible software or bridging software. Good software will help you streamline your entire record-keeping process and offer real-time financial insights allowing you to optimise elements of your business and improve profitability. The benefits could be significant and help you better manage your taxes.
Learn more about MTD for landlords in our comprehensive guide here
Regardless of how you have kept your records up to this point, Making tax Digital is coming and landlords and self-employed individuals will need to be keeping accurate digital records and have access to MTD compliant software starting from April 2026.
This may seem like it’s still a fair way off, however, as with adopting any new system there can be teething issues. We recommend getting yourself prepared early by finding an accounting software that suits your needs now, you can avoid any potential issues that might arise from such a dramatic shift in methodology.
The first thing to do is to find the software that’s both future-proof and right for you. One that will allow you to keep digital records in an efficient way. You will need to regularly update these records as well as digitise receipts and run key financial reports. As such the software you look for should offer cloud accounting, with a mobile app and receipt scanner.
What you don’t want to happen is to be scrambling for software last minute only to decide halfway through the year that you don’t like it and want to change it.
Finally, the software you choose needs to be MTD compatible. Landlord Studio is currently MTD compatible through our seamless integration with Xero. We are aiming to also be directly integrated and approved by the HMRC before the MTD for ITSA deadline.
Speak to your accountant or bookkeeper if you are thinking about registering early for MTD for ITSA (which you can do here).
MTD for ITSA will affect sole traders, self-employed individuals, and landlords earning above the £10,000 threshold (unless you have an exemption – see below).
If you own multiple businesses, then the income earned from all of these combined contributes to this £10,000 threshold.
However, those earning below the threshold can continue to use the old HMRC system for filing their returns.
The HMRC says that you can apply for an exemption from MTD ITSA if:
Additionally, the latest MTD ITSA policy update indicates that the following taxpayers may also be able to obtain an exemption (at least from when it first comes into effect):
HMRC has confirmed that the quarterly filing deadlines for all unincorporated businesses filing under MTD for income tax will be: 5 August, 5 November, 5 February, and 5 May.
Those businesses with accounting dates of 31 March to 5th April will also file by these deadlines.
The first mandated MTD submission for the first quarter to 5 July 2026 will have to reach HMRC by 5 August 2026, which is a Saturday in the Summer Bank Holiday weekend in Scotland.
To sign up, you must be registered to file Self Assessment tax returns. You’ll need the Government Gateway user ID and password you use to file returns.
You must have software that’s compatible with Making Tax Digital for Income Tax before you sign up.
If you’re unsure how to proceed, you can ask your software provider, accountant, or bookkeeper how to sign up for MTD for ITSA.
When you sign up the HMRC will request the following information: business name, business start date, email address, national insurance number, accounting period, and accounting type to apply.
If you’re looking for more information, HMRC’s guidance on signing up is a handy resource.
From the deadline, you will need to keep digital records of income and expenditure. There are three parts you’ll need to submit for MTD for ITSA:
While it may feel like you have plenty of time to prepare for MTD for ITSA, it’s absolutely worth signing up early if you can or talking to your accountant about how you can get prepared. Taking the time to get used to the digital tools now will undoubtedly make the transition smoother.
Landlord Studio is a cloud accounting designed specifically for landlords. Easily track income and expenses on the go, digitise receipts, and instantly generate financial reports.
Landlords can also pair Landlord Studio’s suite of property management tools and easy-to-use income and expense tracking features with Xero using our seamless Xero integration.
Our Xero integration automatically syncs all financial data entered into Landlord Studio with your connected Xero account. Enabling users to take full advantage of Xero’s industry-leading accounting features and stay MTD compliant.
Landlord Studio will be HMRC approved before the deadline.