{"id":6029,"date":"2024-10-23T12:59:04","date_gmt":"2024-10-23T11:59:04","guid":{"rendered":"https:\/\/www.bainesjewitt.co.uk\/blog\/?p=6029"},"modified":"2024-10-23T11:59:07","modified_gmt":"2024-10-23T11:59:07","slug":"mtd-for-itsa-when-will-you-have-to-report-and-what-you-need-to-know","status":"publish","type":"post","link":"https:\/\/www.bainesjewitt.co.uk\/blog\/mtd-for-itsa-when-will-you-have-to-report-and-what-you-need-to-know\/","title":{"rendered":"MTD for ITSA \u2013 When will you have to report and what you need to know\u00a0"},"content":{"rendered":"

You may already be familiar with Making Tax Digital (MTD), but the extension to Income Tax Self Assessment (ITSA) is something many self-employed individuals and landlords need to start preparing for.\u00a0<\/span>\u00a0<\/span><\/p>\n

What is MTD for ITSA?<\/span><\/b>\u00a0<\/span><\/p>\n

MTD for ITSA is the Government\u2019s plan to digitise the way individuals with self-employment or property income report their tax.\u00a0<\/span>\u00a0<\/span><\/p>\n

Instead of an annual tax return, you will submit income and expense details quarterly through approved software.<\/span>\u00a0<\/span><\/p>\n

When will you need to start using MTD for ITSA?<\/span><\/b>\u00a0<\/span><\/p>\n

April 2026<\/span><\/b> \u2013 If your gross income from self-employment and\/or property exceeds \u00a350,000 based on your 2024\/25 tax return.<\/span>\u00a0<\/span><\/p>\n

April 2027<\/span><\/b> \u2013 If your combined income from these sources is above \u00a330,000 based on your 2025\/26 tax return.<\/span>\u00a0<\/span><\/p>\n

The new reporting requirements will not apply if your income is below \u00a330,000, and certain exemptions are available for those who cannot meet the digital requirements.<\/span>\u00a0<\/span><\/p>\n

How do you know if you are affected?<\/span><\/b>\u00a0<\/span><\/p>\n

HM Revenue & Customs (HMRC) has released a guidance tool that allows taxpayers to check if they need to comply with MTD for ITSA.\u00a0<\/span>\u00a0<\/span><\/p>\n

The tool will ask a series of questions and give you a clear indication of when you need to start using MTD for ITSA.\u00a0<\/span>\u00a0<\/span><\/p>\n

However, note that this tool is not applicable for those with foreign property income and can incorrectly assume that all company directors are within self-assessment.<\/span>\u00a0<\/span><\/p>\n

What is included in your qualifying income?<\/span><\/b>\u00a0<\/span><\/p>\n

Your qualifying income is the total amount you earn from self-employment and\/or property in a tax year.\u00a0<\/span>\u00a0<\/span><\/p>\n

This will determine whether you meet the thresholds for mandatory MTD reporting.<\/span>\u00a0<\/span><\/p>\n

Exemptions and voluntary sign-up<\/span><\/b>\u00a0<\/span><\/p>\n

Some individuals are exempt from MTD for ITSA, such as those without a National Insurance number, trustees, and personal representatives.\u00a0<\/span>\u00a0<\/span><\/p>\n

If you are not required to use MTD for ITSA yet, you can still voluntarily sign up to get ahead of the changes.\u00a0<\/span>\u00a0<\/span><\/p>\n

We can assist you with signing up early should you so wish to. .\u00a0<\/span>\u00a0<\/span><\/p>\n

Preparing for MTD for ITSA<\/span><\/b>\u00a0<\/span><\/p>\n