According to a government statement, the MTD for ITSA rules will start:
• For businesses, self-employed individuals, and landlords earning over £50,000, from April 2026;
• For those with income over £30,000, from April 2027; and
• For partnerships, on a later date to be confirmed.
Currently, as per the legislation, for individuals with an annual turnover over £50,000:
• If their business existed before 6 April 2025, their digital start date is 6 April 2026;
• If they start a business on or after 6 April 2025 and must file a personal tax return for that business, the MTD for ITSA rules will apply:
– If they receive a notice to file for Year 1 after 31 October in Year 2, it will apply from 6 April in Year 4. Here, Year 1 is the assessment year for that return; and
– In other cases, it will apply from 6 April in Year 3, where Year 1 is the assessment year for that return.
Example
Lucy starts her business in 2025–26. On 6 April 2026, HMRC gives her a notice to file for 2025–26.
Lucy must use MTD for ITSA from 6 April 2027.
If HMRC issues the notice on 31 December 2026 (after 31 October in Year 2), Lucy will need to use MTD for ITSA from 6 April 2028.
One response
[…] thorough records ensures that you meet HMRC guidelines, avoiding penalties. HMRC is rolling out the MTD requirements for Income Tax Self-assessments that will make the record keeping […]