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MTD IT FAQ: Everything You Need to Know

  • Writer: Paul Whitehouse
    Paul Whitehouse
  • Mar 15
  • 2 min read

What is MTD IT?

MTD IT (Making Tax Digital for Income Tax Self-Assessment), also known as MTD for ITSA1, is part of HMRC’s initiative to modernize the tax system. It requires self-employed individuals and landlords to keep digital records of their income and expenses and submit quarterly updates to HMRC using MTD-compatible software. you can read more about it in our MTD guide here.


Who does MTD IT apply to?

Self-employed individuals and landlords with annual business or property income exceeding £30,000


When does MTD IT start?

April 2026: For individuals earning over £50,000 annually.

April 2027: For individuals earning between £30,000 and £50,000 annually.


What records do I need to keep digitally?

You’ll need to maintain digital records of all self-employed or rental Income and Expenses and keep banking records related to your business or property.

These records must be stored in MTD-compatible software and submitted to HMRC via quarterly updates.


How often do I need to report under MTD IT?

You’ll need to submit:

  • Four quarterly updates summarizing your income and expenses throughout the year.

  • An End of Period Statement (EOPS) at the end of the tax year to confirm your figures.

  • A Final Declaration to declare all your income and confirm your tax liability.


What software do I need for MTD IT?

You’ll need MTD-compatible software to manage your records and submit updates. Popular options include:

QuickBooks Online

Hammock for landlords

FreeAgent

Sage

Xero

IRIS Kashflow

Clearbooks

and more on the way... 2

What happens if I don’t comply with MTD IT?

Failure to comply with MTD IT requirements may result in penalties from HMRC. These could include fines for late submissions or non-compliance with digital record-keeping rules. 3


Do I still need to file a Self Assessment tax return?

No, MTD IT replaces the traditional annual Self Assessment tax return. Instead, you’ll submit quarterly updates, an EOPS, and a Final Declaration through your MTD-compatible software.


How can Chariot Accountants help me with MTD IT?

We provide:

  • Expert advice tailored to your situation,

  • Discounts on MTD-compatible software,

  • Setup and training for MTD-compatible software,

  • Assistance with quarterly updates and year-end submissions,

  • Ongoing support to ensure compliance and peace of mind.


What should I do now to prepare for MTD IT?

  • Determine when MTD IT will apply to you based on your income.

  • Choose and set up MTD-compatible software.

  • Organize your records to ensure accuracy.

  • Reach out early and consider joining the open beta with us.


Still Have Questions? We’re Here to Help!

At Chariot Accountants, we specialize in helping self-employed individuals and landlords prepare for MTD IT. Whether you need help setting up software or understanding your obligations, we’re just a call away.

We are actively seeking volunteers who may be interested in joining the MTD IT open beta so feel free to reach out and help us spearhead this change.


Resources:

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