{"id":222296,"date":"2024-03-06T10:01:00","date_gmt":"2024-03-06T10:01:00","guid":{"rendered":"https:\/\/www.pearlaccountants.com\/?p=222296"},"modified":"2024-03-06T10:01:02","modified_gmt":"2024-03-06T10:01:02","slug":"making-tax-digital-for-income-tax","status":"publish","type":"post","link":"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/","title":{"rendered":"Making Tax Digital for Income Tax: What You Need to Know Now"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Introduction\" title=\"Introduction&nbsp;\">Introduction&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Understanding_MTD_for_Income_Tax_Self-Assessment_ITSA\" title=\"Understanding MTD for Income Tax Self-Assessment (ITSA)&nbsp;\">Understanding MTD for Income Tax Self-Assessment (ITSA)&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Phased_changes\" title=\"Phased changes&nbsp;\">Phased changes&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Income_Thresholds_and_Criteria\" title=\"Income Thresholds and Criteria&nbsp;\">Income Thresholds and Criteria&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Digital_Record-Keeping\" title=\"Digital Record-Keeping&nbsp;\">Digital Record-Keeping&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Quarterly_Submissions\" title=\"Quarterly Submissions&nbsp;\">Quarterly Submissions&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Cumulative_Calculation_Periods\" title=\"Cumulative Calculation Periods&nbsp;\">Cumulative Calculation Periods&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Maintaining_Records_and_Software_Compatibility\" title=\"Maintaining Records and Software Compatibility&nbsp;\">Maintaining Records and Software Compatibility&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Using_Spreadsheets_with_MTD\" title=\"Using Spreadsheets with MTD&nbsp;\">Using Spreadsheets with MTD&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Bridging_Software_for_Spreadsheets\" title=\"Bridging Software for Spreadsheets&nbsp;\">Bridging Software for Spreadsheets&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Choosing_the_Right_Software\" title=\"Choosing the Right Software&nbsp;\">Choosing the Right Software&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Exemptions_Deferrals_and_Penalties_in_MTD_for_ITSA\" title=\"Exemptions, Deferrals, and Penalties in MTD for ITSA&nbsp;\">Exemptions, Deferrals, and Penalties in MTD for ITSA&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Exemptions\" title=\"Exemptions&nbsp;\">Exemptions&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Deferrals\" title=\"Deferrals&nbsp;\">Deferrals&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Penalties\" title=\"Penalties&nbsp;\">Penalties&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Benefits_and_Potential_Impacts_of_Embracing_MTD_for_ITSA\" title=\"Benefits and Potential Impacts of Embracing MTD for ITSA&nbsp;\">Benefits and Potential Impacts of Embracing MTD for ITSA&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Benefits_for_Taxpayers\" title=\"Benefits for Taxpayers&nbsp;\">Benefits for Taxpayers&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Benefits_for_HMRC\" title=\"Benefits for HMRC&nbsp;\">Benefits for HMRC&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/#Conclusion\" title=\"Conclusion&nbsp;\">Conclusion&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span><strong>Introduction<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.gov.uk\/government\/publications\/making-tax-digital\/overview-of-making-tax-digital\" target=\"_blank\" rel=\"noreferrer noopener\">Making Tax Digital (MTD)<\/a> for Income Tax represents a significant shift in the way taxpayers record and submit their tax information to HM Revenue &amp; Customs (HMRC). This initiative is part of a broader digital transformation to make tax administration more effective, efficient, and easier for taxpayers through a fully digital tax system.<\/p>\n\n\n\n<div style=\"border:3px solid #214A24; border-radius: 5px; padding-left:1em; padding-right:1em; padding-top:1em; background-color:#ffffff;\">\n<p>In essence, MTD for Income Tax requires individuals to maintain digital records and use software to submit quarterly updates to HMRC.<\/p><\/div>\n\n\n\n<div style=\"height:15px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>Taxpayers and professionals need to grasp the scope of MTD for Income Tax, as it affects self-employed individuals and landlords initially. You will find that understanding MTD is crucial not just for compliance but also for leveraging its potential benefits such as real-time tax calculations and reduced errors through automated processes. This overview will shed light on the purpose of MTD, its benefits, and why a thorough understanding is essential for smooth adaptation to these changes.<\/p>\n\n\n\n<div style=\"border:3px solid #214A24; border-radius: 5px; padding-left:1em; padding-right:1em; padding-top:1em; background-color:#ffffff;\">\n<p>&#8220;Unlock your financial potential with Pearl Accountants, your premier choice for expert tax solutions tailored to your needs \u2013 let&#8217;s maximize your returns together!&#8221;<\/p><\/div>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Understanding_MTD_for_Income_Tax_Self-Assessment_ITSA\"><\/span><strong>Understanding MTD for Income Tax Self-Assessment (ITSA)<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) is an initiative by HM Revenue and Customs (HMRC) aiming to modernize the tax system. This transformation requires taxpayers to maintain digital records and use software to submit their tax returns.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Phased_changes\"><\/span>Phased changes&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The implementation of MTD for ITSA will occur through a <em>phased mandate approach<\/em>. This strategic rollout allows for a smoother transition into the new system. The timeline is as follows:&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>From April 2026<\/strong>: Self-employed individuals and landlords with annual business or property income above \u00a350,000 will be required to follow MTD for ITSA.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul>\n<li><strong>From April 2027<\/strong>: The threshold lowers, mandating those with income between \u00a330,000 and \u00a350,000.<\/li>\n<\/ul>\n\n\n\n<div style=\"border:3px solid #214A24; border-radius: 5px; padding-left:1em; padding-right:1em; padding-top:1em; background-color:#ffffff;\">\n<p>Autumn statement November 2023 confirmed not to include self-employed individuals with an income below \u00a330,000 for the time being.<\/p><\/div>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Income_Thresholds_and_Criteria\"><\/span>Income Thresholds and Criteria&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Specific income thresholds determine registration into MTD for ITSA. Here is what you need to know about the criteria:&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Eligibility<\/strong>: If your income from self-employment or property exceeds the designated thresholds within a tax year, you are required to comply with MTD for ITSA rules.&nbsp;<\/li>\n\n\n\n<li><strong>Multiple Incomes<\/strong>: Should you have several sources of income that cumulatively cross the threshold, you are also brought into the scope of MTD.&nbsp;<\/li>\n\n\n\n<li><strong>Income Calculation<\/strong>: The total income is calculated before any allowances or expenses. It includes the sum of all income from self-employment and property.<\/li>\n<\/ul>\n\n\n\n<div style=\"border:3px solid #214A24; border-radius: 5px; padding-left:1em; padding-right:1em; padding-top:1em; background-color:#ffffff;\">\n<p>If you are a self-employed individual or property landlord expecting to make an income above \u00a350,000 in the next few years, you will be required to register for MTD for income tax from April 2026.<\/p><\/div>\n\n\n\n<div style=\"height:15px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>MTD for ITSA revolutionizes how taxpayers report income and expenses to HM Revenue &amp; Customs (HMRC). <a href=\"https:\/\/www.xero.com\/uk\/programme\/making-tax-digital\/mtd-itsa-quarterly-updates\/\" target=\"_blank\" rel=\"noreferrer noopener\">Quarterly updates<\/a> are now a cornerstone of this new reporting framework, requiring taxpayers to submit income and expense information every three months. This approach aligns closely with the rhythm of business operations, aiming to provide a more real-time view of one&#8217;s tax situation.<\/p>\n\n\n\n<p>Here is what you need to know about the reporting process:&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Digital_Record-Keeping\"><\/span>Digital Record-Keeping&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Taxpayers must maintain digital records of their business transactions. This ensures that the quarterly submissions are based on accurate, up-to-date information.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Quarterly_Submissions\"><\/span>Quarterly Submissions&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Each quarter, you are expected to submit a summary of your business income and expenses through compatible software. The idea is to reflect the performance of your business periodically rather than just once at year-end.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Cumulative_Calculation_Periods\"><\/span>Cumulative Calculation Periods&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Rather than treating each quarter in isolation, MTD for ITSA uses cumulative calculation periods. This means that each quarterly update builds upon the last, culminating in a comprehensive year-end report.&nbsp;<\/p>\n\n\n\n<p>If you manage multiple businesses or property ventures, you will need to give special consideration to how you organize your records and reports:&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Separate Updates for Each Business<\/strong>: You must send separate quarterly updates for each trade or property business you have. This separation ensures clarity in reporting and reflects the distinct performance of each venture.&nbsp;<\/li>\n\n\n\n<li><strong>Cumulative Data<\/strong>: Despite separate updates, your annual tax responsibility considers the cumulative results across all businesses.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>By maintaining clear digital records and understanding these obligations, you can ensure compliance with MTD for ITSA requirements without unnecessary stress at year-end.<\/p>\n\n\n\n<div style=\"border:3px solid #214A24; border-radius: 5px; padding-left:1em; padding-right:1em; padding-top:1em; background-color:#ffffff;\">\n<p>Under MTD for income tax, taxpayers will be required to file 4 quarterly returns and one final return of their income and expenses to the HMRC. So, in total there are going to be 5 returns for a tax year.<\/p><\/div>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Maintaining_Records_and_Software_Compatibility\"><\/span><strong>Maintaining Records and Software Compatibility<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Embracing MTD for ITSA requires adopting certain technological tools. One important tool is <strong>API-enabled software<\/strong>, which helps with tax record-keeping and return submission. HMRC requires the use of approved software that has API capabilities. These specialized tools ensure data security, accuracy, and smooth communication with HMRC servers.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Using_Spreadsheets_with_MTD\"><\/span>Using Spreadsheets with MTD&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If you are used to using spreadsheets for record-keeping, there is good news. You can still incorporate spreadsheets into your digital workflow under MTD for ITSA. This flexibility allows you to use familiar tools while following the new regulations.&nbsp;<\/p>\n\n\n\n<p>However, there are some guidelines for using spreadsheets:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Data must be digitally transmitted from the spreadsheet or original source to HMRC&nbsp;<\/li>\n\n\n\n<li>Summary information should not be retyped into another package&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bridging_Software_for_Spreadsheets\"><\/span>Bridging Software for Spreadsheets&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>To meet these requirements, you can use bridging software. This type of solution acts as a digital &#8216;bridge&#8217;, transferring data from your spreadsheet to HMRC in a compliant way. It effectively connects your existing workflow with the needs of MTD for ITSA.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Choosing_the_Right_Software\"><\/span>Choosing the Right Software&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is important to choose software that aligns with HMRC&#8217;s rules for digital record keeping and return submissions. You can refer to a list of <a href=\"https:\/\/www.gov.uk\/guidance\/find-software-thats-compatible-with-making-tax-digital-for-income-tax\" target=\"_blank\" rel=\"noreferrer noopener\">MTD compatible software<\/a> to help you find the best tool for your needs.&nbsp;<\/p>\n\n\n\n<p>The shift towards digital tax management may seem challenging at first, but remember that these changes are designed to make processes smoother and more efficient.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemptions_Deferrals_and_Penalties_in_MTD_for_ITSA\"><\/span><strong>Exemptions, Deferrals, and Penalties in MTD for ITSA<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Not all entities will need to navigate the waters of MTD for ITSA; certain groups are exempt from these requirements.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemptions\"><\/span>Exemptions&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul>\n<li><strong>Non-resident companies<\/strong>, those not based in the UK (United Kingdom), fall outside the scope of MTD for ITSA.&nbsp;<\/li>\n\n\n\n<li><strong>Trustees, executors, and administrators<\/strong> managing estates also find themselves exempt, easing the administrative burden during what can be a complex fiduciary process.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Deferrals\"><\/span>Deferrals&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>General partnerships have been granted additional time to prepare for MTD for ITSA. MTD for ITSA for these business structures has been deferred, with a new commencement date yet to be announced. This gives general partnerships valuable breathing space to ensure they are fully compliant once their start date arrives.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalties\"><\/span>Penalties&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A new penalty regime has been established to ensure compliance with MTD obligations:&nbsp;<\/p>\n\n\n\n<ul>\n<li>The system is points-based, where non-compliance instances accumulate points leading to financial penalties.&nbsp;<\/li>\n\n\n\n<li>For each submission deadline missed, a point is accrued.&nbsp;<\/li>\n\n\n\n<li>Once a certain threshold is reached, a penalty is charged.&nbsp;<\/li>\n\n\n\n<li>This regime encourages timely submissions without immediately penalizing those who may miss a single deadline.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>By being aware of these exemptions and deferrals and understanding the penalty framework, you can better navigate the nuances of MTD for ITSA compliance.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_and_Potential_Impacts_of_Embracing_MTD_for_ITSA\"><\/span><strong>Benefits and Potential Impacts of Embracing MTD for ITSA<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The shift to MTD for ITSA has significant advantages, not just for HMRC but also for taxpayers. These benefits are realized through the adoption of MTD processes, which are designed to make tax filing simpler, more convenient, and less prone to errors.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_for_Taxpayers\"><\/span>Benefits for Taxpayers&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>MTD&#8217;s digital approach promotes real-time record-keeping, facilitating a <em>continual view<\/em> of your tax situation. In essence, this means you can:&nbsp;<\/p>\n\n\n\n<ol start=\"1\">\n<li>Avoid the stress of annual tax deadlines&nbsp;<\/li>\n<\/ol>\n\n\n\n<ol start=\"2\">\n<li>Easily monitor income and expenses&nbsp;<\/li>\n<\/ol>\n\n\n\n<ol start=\"3\">\n<li>Make informed financial decisions&nbsp;<\/li>\n<\/ol>\n\n\n\n<p>Embracing this technology-driven initiative can also lead to increased efficiency in managing your tax affairs. With automated data entry and calculations, MTD software minimizes the risk of making mistakes. <em>Accuracy is paramount<\/em> in tax management &#8211; one minor error could lead to significant issues down the line.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_for_HMRC\"><\/span>Benefits for HMRC&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>HMRC also stands to gain from this shift. A streamlined system means fewer resources spent on rectifying errors and chasing up late payments, allowing them to focus on more pressing matters.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>MTD for income tax requires taxpayers to keep their accounting data electronically. Those who earn income over \u00a350,000 will need to comply with MTD from April 2026 while those earning between \u00a330,000 to \u00a350,000 will need to comply from April 2027. Under the MTD, taxpayers will be required to make quarterly filings of their income and expenses in addition to one final declaration to be filed after the end of the tax year to settle the tax affairs for that year.&nbsp;<\/p>\n\n\n\n<p>If you are worried about complying with MTD for income tax, do not hesitate to contact <a href=\"https:\/\/www.pearlaccountants.com\/accountants-in-london\/\" target=\"_blank\" rel=\"noreferrer noopener\">Pearl Accountants in London<\/a> who will take care of your compliance worries. Give us a <a href=\"https:\/\/www.pearlaccountants.com\/contact\/\" target=\"_blank\" rel=\"noreferrer noopener\">call today<\/a> to find out how we can help.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction&nbsp; Making Tax Digital (MTD) for Income Tax represents a significant shift in the way taxpayers record and submit their tax information to HM Revenue &amp; Customs (HMRC). This initiative is part of a broader digital transformation to make tax administration more effective, efficient, and easier for taxpayers through a fully digital tax system. In <a href=\"https:\/\/www.pearlaccountants.com\/blogs\/making-tax-digital-for-income-tax\/\" class=\"more-link\">&#8230;<span class=\"screen-reader-text\">  Making Tax Digital for Income Tax: What You Need to Know Now<\/span><\/a><\/p>\n","protected":false},"author":5,"featured_media":222305,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2195,2211],"tags":[5013],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Making Tax Digital (MTD) for Income Tax<\/title>\n<meta name=\"description\" content=\"Making Tax Digital for Income Tax now due to be phased in from April 2016. 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