MTD for Income Tax Self Assessment
Susie Bishop
9th June 2024
What is MTD for ITSA?
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is an upcoming requirement from HMRC, aimed at modernizing the UK tax system. Starting in April 2026, individuals with an income over £50,000 from self-employment or property rental will need to:
- Use MTD compatible software
- Transition to digital financial records
- Submit tax returns quarterly
How Does MTD Change Income Tax Self Assessment?
MTD for ITSA introduces three key changes to the traditional income tax self-assessment process:
1. Quarterly ITSA Submissions:
Instead of submitting a single, comprehensive annual tax return, you'll need to submit quarterly summary data to HMRC. These submissions must be done electronically using compliant software like Balance By Squeegee.
2. Submit End of Period Statement (EOPS):
At the end of each tax year, you will need to submit an End of Period Statement (EOPS) to HMRC. This statement adjusts and confirms the accuracy of your quarterly summaries.
3. Submit Final Declaration:
In addition to the EOPS, you will submit a final declaration to HMRC, detailing any additional income. This final step allows HMRC to confirm the total tax owed, which is payable by January 31 of the following tax year.
How Will MTD for ITSA Help You?
MTD for ITSA, especially when using Balance by Squeegee, will bring several benefits that can streamline your financial administration and help you focus more on your business:
Save Time and Simplify: Balance by Squeegee will consolidate all your financial admin in one place, automating repetitive tasks and providing a clear overview of your financial health.
Improve Accuracy:
With automated processes and digital records, managing your business admin becomes easier and more accurate, allowing for almost instant financial overviews.
Enhance Data Safety:
Balance by Squeegee will ensure your data is secure with features like two-factor authentication (2FA) and data encryption, giving you peace of mind about the safety of your information.
Facilitate Collaboration:
Software will make it easy to collaborate with your accountant or clients by allowing instant sharing of information, streamlining the communication and review process.
As we approach the implementation of MTD for ITSA, using a robust, MTD-compliant software like Balance by Squeegee will not only ensure compliance with HMRC’s requirements but also simplify your financial management. Embrace the digital transformation with Balance by Squeegee and focus more on growing your business, knowing that your financial admin is in capable hands.