07 Jul 2025You may have seen in our recent newsletters that significant changes are on the horizon regarding Making Tax Digital for Income Tax Self Assessment (MTD ITSA). We've summarised the key points for your reference below. In the coming months, HMRC will begin contacting sole traders and landlords who may need to comply with the new rules starting in April 2026. Based on your 2023/24 Personal Tax Return (PTR), we expect you may receive one of these letters. However, whether you are required to comply will be determined by your total combined taxable turnover (from self-employment and property income) reported in your 2024/25 PTR. MTD ITSA – Summary of Key Changes: From April 2026, MTD for ITSA will apply to: Sole traders and landlords with a combined annual turnover over £50,000. From April 2027, the threshold extends to: Those with turnover above £30,000. In April 2028, it will apply to: Those with turnover above £20,000. What Will Be Required Under MTD ITSA? Sole traders and landlords will be required to: Maintain digital business records. Use HMRC-recognised software to manage and submit data. Submit quarterly updates of income and expenses to HMRC. Make a final declaration (similar to your current PTR), which includes other sources of taxable income (e.g. savings or investment income). Comparison: Current vs. Future Requirements Before April 2026 After April 2026 One annual submission Four quarterly updates per business Paper filing deadline: 31 October One annual final declaration per individual Online filing deadline: 31 January Digital submissions via MTD-compliant software Paper records acceptable Digital record-keeping required Separate submissions for rental and self-employment income How to Prepare Due to the requirement for digital record-keeping and software-based filing, we recommend beginning preparations now. OCL is here to help guide you through this transition. We can support you in: Identifying the software most suitable for your business. Establishing best practices for maintaining digital records. Determining the right level of support you'll need from our team. Support Options from OCL You may wish to consider one of the following support levels: Full Support: OCL analyses your records and prepares quarterly submissions on your behalf. We would also continue to prepare and file your final declaration/PTR as we do now. Collaborative Support: You prepare the quarterly returns via software, and OCL reviews them prior to submission. We would still handle the final declaration/PTR as usual. Light Support: You manage and submit the quarterly updates independently, while OCL continues to prepare and submit your final declaration, similar to your current personal tax service with us. Please don't hesitate to contact your account manager or the OCL office if you have any questions or would like to discuss how best to prepare. We're here to help.