MTD for ITSA Readiness Checklist

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) – Are You Ready?

From April 2026, HMRC will require most self-employed individuals and landlords earning over £50,000 to keep digital business records and send quarterly updates to HMRC through approved software.
This checklist will help you prepare early, avoid penalties, and make the transition as smooth as possible.

1️⃣ Understand Whether MTD for ITSA Applies to You
✔️ Do you earn over £50,000 in combined self-employment and/or property income?

✔️ Are you a sole trader or landlord (not yet in a partnership)?

✔️ Do you currently submit a Self Assessment tax return?
If you answered yes to these, you’ll need to follow MTD for ITSA rules from April 2026. If your income is £30,000–£50,000, your start date will likely be April 2027.

2️⃣ Start Keeping Digital Business Records
✔️ Record income and expenses digitally (not just on spreadsheets).

✔️ Capture invoices, receipts, and payments electronically.

✔️ Keep business and personal transactions separate — ideally in different bank accounts.
? Tip: Go digital now so you’re confident with your system before MTD becomes mandatory.

3️⃣ Choose MTD-Compliant Accounting Software
✔️ Use software that connects directly with HMRC — such as Xero.

✔️ Ensure it supports quarterly submissions and end-of-period statements for ITSA.

✔️ Set up bank feeds to automate data entry and reconciliation.
? Why Xero? Xero is fully MTD-ready, easy to use, integrates with HMRC, and gives you real-time visibility over your finances — helping you stay compliant and make better business decisions.

4️⃣ Talk to Your Accountant About Quarterly Reporting
✔️ Discuss how quarterly submissions will work in practice.

✔️ Agree who will prepare and review each update (you or your accountant).

✔️ Understand the submission deadlines and what information is required.

✔️ Plan how to manage adjustments or multiple income sources.
? Don’t go it alone. Quarterly submissions mean four chances per year to make mistakes — a good accountant helps you stay accurate and efficient.

5️⃣ Test Your Digital Systems Early
✔️ Set up your MTD software and link it to your HMRC account.

✔️ Practice digital record keeping now — treat the next few quarters as a trial run.

✔️ Check your reports and reconciliations are complete and correct.

✔️ Keep an eye out for HMRC updates — requirements may evolve before April 2026.
? Early adoption = no last-minute panic.

6️⃣ Understand the Key Dates
? Now – Start preparing and moving to digital record keeping

? April 2026 – MTD ITSA starts for income over £50,000

? April 2027 – Expected start date for income between £30,000–£50,000

? Quarterly – Income & expense updates due (usually within 30 days of each quarter end)

? Annually – Submit an End of Period Statement and a Final Declaration

7️⃣ Get Professional Support
✔️ Choose an accountant experienced in cloud accounting and MTD.

✔️ Ask them to help you:

• Select and set up software
• Review your bookkeeping
• Handle quarterly submissions
• Provide tax planning advice year-round

✔️ Confirm how their MTD support fits into your service package or fees.

? Remember: MTD is more than compliance — it’s an opportunity to modernise how you run your business.

✅ Final Check: Are You MTD Ready?
I know my MTD start date    ☐
I’ve chosen MTD-compliant software    ☐
I’ve set up digital record keeping    ☐
I’ve discussed quarterly reporting with my accountant    ☐
I’ve tested my system before 2026    ☐
I have a plan for ongoing compliance    ☐

? Summary: MTD for ITSA isn’t just about filing more often — it’s about working smarter. Businesses that prepare early with the right software and professional guidance will save time, reduce errors, and gain better control of their finances.

? Need help getting MTD-ready? Work with a Chartered Accountant who uses Xero to help small businesses simplify their accounts, stay compliant, and focus on growth.