A Roadmap to the MTD Year‑End Tax Process
HMRC has released updated guidance on how the year‑end declaration process will work under Making Tax Digital for Income Tax Self Assessment (MTD ITSA)—key knowledge for accountants supporting small businesses and landlords.
What Is the MTD Year‑End Declaration?
Although MTD ITSA replaces the Self Assessment tax return, HMRC will still refer to it as a “tax return” in communications. This return—often called the “MTD tax return”—must be submitted digitally through compliant software.
Key Steps in the MTD Year‑End Process
- Submit quarterly summaries of income and expenses throughout the tax year.
- Use a final declaration to confirm all income, adjustments, and reliefs.
- Submit the final declaration by 31 January following the end of the tax year using MTD-compliant software.
Professional bodies such as the ATT have published updated guidance on client sign‑off responsibilities and compliance requirements. See: ATT MTD FAQs.
When Does MTD ITSA Become Mandatory?
MTD for Income Tax will apply in phases based on a person’s qualifying income from self-employment and property:
- From 6 April 2026: for those earning over £50,000 in 2024–25.
- From 6 April 2027: for those earning between £30,000 and £50,000.
- Date TBC: HMRC is reviewing whether MTD will be extended to those earning under £30,000.
See HMRC’s official guidance: Check MTD Eligibility – GOV.UK.
Prepare Your Practice Now
- Ensure clients are keeping digital records at the transaction level.
- Support clients in choosing MTD‑compatible software or appointing a digital tax agent.
- Encourage early sign-up to HMRC’s MTD pilot scheme during 2025–26 to smooth the transition.
Further detail is available at: MTD Income Tax Countdown – GOV.UK
MTD ITSA will transform year-end tax reporting by replacing Self Assessment with digital quarterly updates and a final declaration. With phased rollout starting April 2026, accountants should act now to guide clients through digital record-keeping and software readiness.
