This is arguably one of the most significant MTD changes as it will affect sole traders, landlords and property investors.

This will require anyone with annual gross business or property income above £10,000 to comply with MTD from April 2026 by recording and reporting their income using HMRC-compliant software every quarter.

This will come into force in the tax year beginning April 2026 for the self-employed and landlords, and April 2027 for all other ITSA taxpayers, such as general partnerships.

If this change affects you, you will need to complete four quarterly submissions, plus an annual return digitally.

According to the latest information from HMRC, taxpayers within the scope of MTD for ITSA must keep digital records of each transaction, including details of which category each of their transactions falls within and the total amount of income in each category.

These categories are themselves separated into two types of income for unincorporated businesses:

  • Businesses with trading profits
  • Businesses with property income

These new requirements are much more onerous than the current Self-Assessment system and so you must prepare as soon as possible for this change.

Some taxpayers may also be required to submit additional information at the end of each quarter.

HMRC has also confirmed that similar to MTD for VAT, those affected by these changes must use functional compatible software from the point of transaction through to the submissions made to HMRC to maintain ‘digital links’.

Businesses must use the correct software to meet the new requirements, such as HMRC-approved cloud accounting software, or a set of compatible software programs that can connect to HMRC systems via its Application Programming Interface (API).

We are already supporting hundreds of businesses with MTD and can offer dedicated advice on cloud accounting systems that are compliant with MTD for ITSA to meet your requirements.

Here to help

If you are unsure of your requirements under MTD for ITSA or would like help preparing for this upcoming change, we are here and ready to help.

We can not only advise you on the preparations for this change but also ensure you remain compliant following the introduction of the new rules.

Speak to the team at Seymour Taylor today to find out how we can help you.

If you require a service not listed here, would like a free consultation or a quote or have any questions about what Seymour Taylor can offer you, please let us know and we can advise on next steps.