Digital records from day one
MTD ITSA requires digital bookkeeping records maintained throughout each quarter. We set up the software, keep the records, and produce the quarterly submissions — no scramble at deadline time.
MTD ITSA
Getting you ready for HMRC's move to digital tax reporting.
Making Tax Digital for Income Tax Self Assessment replaces the annual Self Assessment return with quarterly digital submissions. If it applies to you, the time to prepare is now — not when the first deadline arrives.
The thresholds
MTD ITSA is being phased in from April 2026.
From April 2026
- Applies to sole traders and landlords with qualifying income over £50,000
- Threshold is based on turnover, not profit
- Includes income from self-employment and/or property rental
From April 2027
- Threshold drops to £30,000 qualifying income
- More sole traders and landlords brought into the system
From April 2028
- Threshold drops further to £20,000
- The majority of self-employed individuals and landlords will be affected
The quarterly deadlines
Four submissions per year, plus a year-end finalisation.
Q1 — 6 Apr to 5 Jul
- Submission due: 5 August
Q2 — 6 Jul to 5 Oct
- Submission due: 5 November
Q3 — 6 Oct to 5 Jan
- Submission due: 5 February
Q4 — 6 Jan to 5 Apr
- Submission due: 5 May
A final year-end declaration must also be submitted after Q4 to confirm the totals. MTD ITSA changes how you report — it does not change when tax is paid.
Xero as standard
Books In Order works primarily with Xero, which is HMRC-recognised and MTD-compatible. If you're not already set up on cloud software, we'll get that sorted as part of the service.
All four quarters included
Monthly packages cover bookkeeping and all four quarterly submissions. You won't get a separate invoice every time a return is due — it's a fixed monthly fee covering everything.
Common questions
MTD ITSA FAQs
Does MTD ITSA apply to me?
It applies to individuals who receive income from self-employment and/or property rental above the relevant threshold. The threshold is based on qualifying income (turnover), not profit. If you're a sole trader or a landlord, check your total annual income from those sources against the figures above. If you're unsure, a 20-minute call will give you a clear answer.
I'm employed but I also have self-employment income. Does it apply?
Your employment income is reported by your employer through PAYE as normal and isn't included in the MTD ITSA threshold calculation. Only income from self-employment and/or property rental counts toward the threshold. If that income exceeds the relevant limit, MTD ITSA will apply to that part of your earnings.
Will I have to pay tax quarterly under MTD ITSA?
No. MTD ITSA changes how you report, not when you pay tax. The quarterly submissions are information updates — they show HMRC your income and expenses for that quarter. The actual tax calculation and payment timings remain as they are under Self Assessment.
What software do I need?
You'll need HMRC-recognised, MTD-compatible software. Books In Order works primarily with Xero. If you don't already have cloud accounting software, setting it up is part of the service — we configure it to your business, connect your bank feed, and make sure it's ready from the start.
I currently do my own Self Assessment. What changes?
Quite a bit. Instead of one annual return, you'll need to maintain digital records throughout the year and submit quarterly updates. The final year-end declaration broadly replaces the current Self Assessment return. If you've been managing this yourself, MTD ITSA is likely the point at which it makes sense to get some support in place.
Get ready
Don't leave MTD ITSA until the first deadline.
Setting up properly takes time. A first call costs you nothing and answers most questions.