As an accountant, you’re already familiar with the Making Tax Digital (MTD) initiative—but with the phased rollout of MTD for Income Tax Self Assessment (MTD for ITSA) fast approaching, now’s the time to ensure your clients are prepared.
Whether you’re advising sole traders, landlords, or small business owners, it’s vital to understand the requirements and how to guide your clients through the changes smoothly.
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A Quick Recap: What is MTD for ITSA?
MTD for ITSA is HMRC’s next step in digitising the UK tax system. From April 2026, self-employed individuals and landlords with income above certain thresholds will be required to:
- Keep digital records of income and expenses
- Use MTD-compatible software to maintain records and submit returns
- File quarterly updates with HMRC, rather than just a single annual tax return
- Submit adjustments and a Final Declaration at year end
This is a significant shift in how many of your clients will manage their tax reporting.
Who Will Be Affected and When?
MTD for ITSA will be introduced in stages:
- From April 2026: Clients with annual business and/or property income over £50,000
- From April 2027: Clients earning between £30,000 and £50,000
- From April 2028: Clients earning between £20,000 and £30,000
There is currently no confirmed date for those earning under £20,000, though HMRC is reviewing this group.
What This Means for Your Practice
MTD for ITSA will impact how you manage client workflows and how your clients engage with their record-keeping. To stay ahead, you’ll need to:
1. Segment Your Client Base
Identify which clients fall above the income thresholds and assess their readiness for digital record-keeping.
2. Move Clients to MTD-Compatible Software
Encourage your clients to adopt cloud-based solutions like Clear Books. This ensures they can keep digital records and submit updates directly to HMRC, with minimal disruption.
3. Introduce Quarterly Reporting Routines
Help clients get used to quarterly updates by simulating the process early. This can also provide more frequent insights into their financial performance.
4. Educate Clients
Many clients won’t be aware of the upcoming changes. Regular communication will be key to helping them understand their responsibilities and deadlines.
How Clear Books Can Support You
Clear Books supports MTD now, and is designed specifically with small businesses and landlords in mind. It’s a simple, intuitive tool that gives your clients confidence in managing their finances—while giving you the visibility you need to offer timely advice and support.
With features like bank feeds, automations to code bank transactions automatically, and advanced document scanning, plus direct MTD submission to HMRC, Clear Books helps streamline your practice while keeping clients compliant.
Stay Informed and Ahead of the Curve
The rules around MTD for ITSA are still evolving, and deadlines could shift. Book a call with us to discuss how we can help, or start a free trial to experience Clear Books on your own time. If you’re not ready yet you can sign up for our email updates using the form on this page to receive the latest guidance, product updates, and practical resources to help your clients transition smoothly.
Get your clients ready now—before the rush begins.
