Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is approaching fast, and HMRC’s advertising push is only adding to the noise. In this episode, Simon and Laura cut through the confusion and explain exactly who MTD ITSA applies to, when it starts, and what the practical impact will be for sole traders and landlords. You get the key thresholds (and how they step down each year), what quarterly reporting really means, what software you’ll need, and where people are most likely to get caught out, especially non-resident landlords and internationally mobile taxpayers.
Key topics covered:
- What “MTD ITSA” actually is (and how it differs from MTD for VAT)
- Start date: 6 April 2026 — who must join first
- The staged income (turnover) thresholds:
- £50,000+ from 6 April 2026
- £30,000+ from 6 April 2027
- £20,000+ from 6 April 2028
- It applies to sole traders and landlords (not partnerships, yet)
- Turnover means income/receipts, not profit
- Multiple sources add together (e.g., trading + rental income)
- The 'quarterly update' reality: unadjusted/cash-style reporting, with year-end adjustments later
- The admin shock for landlords and those below the VAT threshold who haven’t kept digital records before
- Practical considerations: separate bank accounts, receipt capture, and staying 'MTD-ready'
- Who may be outside the system (e.g., certain non-residents without a National Insurance number; digitally excluded individuals)
- Non-residents: reporting focuses on UK-taxable elements, not worldwide income
- Why HMRC is doing it (and why it may feel like more admin than 'business insight')
- What still isn’t clear: how HMRC will calculate payments/tax due during the year
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