What is MTD?
Making Tax Digital (MTD) is an initiative to modernise the tax system, simplifying tax management through digital record keeping, mandatory HMRC-compatible software, and electronic quarterly tax returns.
What is HMRC-compatible software?
HMRC-compatible software meets official reporting standards for MTD, enabling:
- Direct digital records
- Easy tax submissions
- Accurate tax management
Why choose Xero for Making Tax Digital?
Xero is fully compliant with MTD requirements, offering users:
- Cloud-based accessibility
- Scalability
- Comprehensive reporting
- Cloud-based accessibility
The cloud-based nature of Xero means you can manage your financial data from anywhere, ensuring that your records are always accessible and up-to-date, a key requirement for MTD compliance.
- Scalability
As your business grows, Xero adapts, supporting everything from sole traders to larger enterprises. Scalability is essential as MTD for ITSA may bring new reporting requirements as your business evolves.
- Comprehensive reporting
With MTD for ITSA, it’s crucial to have accurate financial reports ready for submission. Xero provides detailed insights into profits, cash flow, and expenses, helping you to stay compliant and prepared during tax season.
What is MTD for ITSA?
MTD for Income Tax Self-Assessment (ITSA) requires self-employed individuals and landlords to keep digital records and submit quarterly updates starting April 2026, for incomes above specified thresholds.
What’s Changing in MTD for ITSA by April 2026?
Starting April 2026, self-employed individuals and landlords earning over £50,000 will need to adhere to MTD for ITSA requirements.
Further Changes from April 2027
From April 2027, those with business or property income between £30,000 and £50,000 will also join MTD for ITSA.
How can we help?
From selecting compatible software (like Xero) to mastering digital record-keeping, our team will ensure you meet MTD requirements with ease.
Transitioning to MTD can seem daunting, but we’re here to support you every step of the way.