HMRC is sending letters re MTD for ITSA

Anna Stubbs • March 18, 2025

You may find a brown letter from HM Revenue & Customs (HMRC) dropping onto your doormat soon, with details of the soon-to-be-mandatory MTD for ITSA.

But what is ‘MTD for ITSA’ and why do you need to know about it?

Your two-minute guide to MTD for ITSA


Making Tax Digital for Income Tax & Self Assessment (or MTD for ITSA) is part of HMRC’s ongoing initiative to convert the UK tax return process over to a digital system.


If you’re a sole trader or landlord, you’ll soon need to:

  • Keep digital records of all your income and expenses.
  • Use MTD-compatible software for your bookkeeping and accounting.
  • Submit regular quarterly digital reports to HMRC.
  • Send a full digital tax return at the end of the tax year.


Landlords and sole traders who fall into the following categories will soon find it’s mandatory to use the MTD for ITSA system.

  • from April 2026, for those with qualifying income over £50,000.
  • from April 2027, for those with qualifying income over £30,000.


A brown envelope with your MTD ITSA reminder


From April 2025, HMRC will be starting a campaign to raise awareness of the looming deadline to become compliant with the MTD for ITSA rules.


This will be kickstarted with an official HMRC brown envelope being sent to sole traders and landlords with a total self-employment and/or property income of over £50,000.


You’ll receive a letter if your 2023 to 2024 self assessment tax return shows your total income (turnover, not profit) as being either over, or close, to £50,000.


Don’t panic! We can help you get ready for MTD



An official letter from HMRC can sometimes be cause for concern. But there’s no need to worry unduly about MTD for ITSA. The mandatory deadline for compliance is still a year away, so there’s plenty of time to update your systems and get yourself compliant.


Come and talk to the team and we’ll explain the implications of MTD for ITSA, the need for digital records and how to get compatible cloud accounting software up and running.

Making Tax Digital to be extended to more sole traders and landlords

By Anna Stubbs • April 9, 2025
Hiding in the HM Revenue & Customs (HMRC) announcements published on 26 March was a technical note entitled ‘Modernising the tax system through Making Tax Digital‘. This note announces that the income threshold for Making Tax Digital for Income Tax & Self Assessment (or MTD for ITSA) is to drop to £20,000 per annum for sole traders and landlords. If you fall into this category, this means moving your tax completely over to digital by April 2026. But don’t worry, let’s see what MTD for ITSA is all about.

Reducing the uncertainty: financial forecasting and planning

By Anna Stubbs • April 9, 2025
Uncertainty can be a major threat to your strategic financial planning. Being unsure of what lies around the corner makes it difficult to make those important financial decisions around operational budgets, investment and growth funding. But by using forecasting and scenario-planning, you make it easier to manage your finances and reduce some of the financial uncertainty.

What's new in Xero (Spring 2025)

By Anna Stubbs • April 9, 2025
Some great new enhancements have come to Xero in the first few months of the year, here's some important features that have been released: Enhancements to the new invoicing Keyboard shortcuts. Drag and drop attachments. Date Picker quick select. Exchange rate adjustments in the invoice. Tracking categories for invoices. Automated bill entry The ability to upload bills directly to Xero, create one or many bills by dragging and dropping multiple files. Xero creates draft bills with the key details, and the original document is attached. Other important features (region dependent) Bank feed updates (Australia adds Suncorp Bank, United States gains PNC Commercial). Simplified whole operations with improved sales orders (United States). Easier 1099 reporting and filing (United States). Streamlined tax workflow and compliance (United Kingdom). Easier reporting (United States Schedule C compliance report, New Zealand not-for-profit tier 3 & 4 PBE reports). For the full breakdown read Xero's update .