From April 2026, many self-employed individuals and landlords will be required to submit income tax updates to HMRC every quarter under the new Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) rules.
If this applies to you, you’ll need to keep digital records and send summaries of your income and expenses to HMRC every three months—a big change from the current annual Self Assessment system.
Who Will Be Affected?
You’ll fall under the new MTD rules from April 2026 if:
- You are self-employed or a landlord
- Your total business and/or property income is over £50,000 per year
(Those earning over £30,000 will join the system from April 2027.)
What Will You Need to Do?
Under MTD for ITSA, instead of one tax return a year, you’ll be required to:
- Keep digital records of income and expenses
- Submit quarterly updates to HMRC (every 3 months)
- Send a final declaration at the end of the tax year
This means more frequent reporting—and more pressure to keep your books up to date throughout the year.
What Kind of Reporting Does HMRC Expect?
Under MTD for ITSA, HMRC requires:
- Quarterly updates – A summary of your income and expenses every 3 months
- End of Period Statement (EOPS) – Confirming that all quarterly submissions are complete and correct at year-end
- Final Declaration – Bringing together all your income sources (business, property, employment, savings, pensions) to calculate your final tax bill
These quarterly updates are not full tax returns, but HMRC uses them to estimate your ongoing tax position throughout the year.
How Accurate Do Records Need to Be?
HMRC expects fairly accurate, up-to-date digital records at all times:
- Each transaction (income or expense) must be recorded in your software
- Entries should be categorised correctly (e.g., rent received, utilities, travel expenses)
- Quarterly submissions must be a true reflection of your accounts at that point in time, even though adjustments such as allowances or reliefs can be applied in the final declaration
In short, records don’t have to be “finalised” each quarter, but they must be correct and consistent. Using HMRC-approved software like FreeAgent helps reduce the risk of errors and ensures full compliance.
Looking for an Easier Way to Manage It All?
If you’re still using spreadsheets or manual records, now is the perfect time to upgrade your system—and FreeAgent could be the ideal solution.
If you already have a business account with NatWest, Royal Bank of Scotland, Mettle, or Ulster Bank NI, you’re entitled to FreeAgent at no cost. That’s a powerful, fully HMRC-compliant accounting tool—without any extra expense.
Why Consider FreeAgent?
Here are just a few reasons our clients are making the switch from manual records:
Key Benefits of Using FreeAgent
✅ Automatic bank feeds – Transactions from your business account flow in automatically.
✅ Quarterly tax estimates – Keep track of how much tax you owe throughout the year.
✅ Digital record-keeping – Fully compliant with MTD requirements.
✅ Direct submission to HMRC – File VAT and (soon) income tax updates straight from the platform.
✅ Real-time overview – See your cashflow, expenses, and profit at a glance.
✅ Access anywhere – Use FreeAgent via desktop or mobile app.
As your accountants, FreeAgent also makes it easier for us to help you stay compliant and ensure everything is in order—well before the deadlines.
Don’t Wait Until 2026 – Prepare Now
The best way to avoid a last-minute scramble is to start getting comfortable with digital accounting today.
Whether you’re already eligible or just want to explore your options, we’re here to help.
Other software providers are available and we are happy to work with these—however, there will generally be a cost involved. If you are a current client, please reach out to your client account manager to discuss your options in more detail.
Speak to F9 Consulting Today
At F9 Consulting Limited, we help self-employed professionals and landlords navigate tax changes with confidence. Get in touch with us to discuss how MTD will affect your business and how we can support you in making the transition.
📞 Call us: 01277 223278
✉️ Email us: sales@f9consulting.co.uk
🌐 Visit us: www.f9consulting.co.uk
