HMRC MTD-Compatible Software for Income Tax Self Assessment (ITSA) 2026

Introduction to Making Tax Digital for Income Tax Self Assessment (MTD ITSA)

The UK tax landscape is undergoing its most significant transformation in decades with HMRC's Making Tax Digital initiative. For sole traders and landlords, the focus is on MTD for Income Tax Self Assessment, which becomes mandatory from April 2026 for those with qualifying income over £50,000. This change necessitates a fundamental shift from traditional annual tax returns to a system of digital record-keeping and quarterly updates submitted directly to HMRC via MTD-compatible software.

HMRC's latest Agent Update Issue 142 specifically urges tax agents and their clients to proactively verify that their chosen accounting software meets all MTD ITSA requirements. This includes ensuring the software can handle quarterly income and expense updates, End of Period Statements, and the final declaration. The guidance also clarifies that taxpayers can use multiple software products if they integrate properly, allowing for flexibility in managing different income streams. Non-compliance carries the risk of penalties, underscoring the urgency for affected taxpayers to prepare. This comprehensive guide will navigate the complexities of MTD ITSA, highlight the features of compliant software, and assist you in making an informed choice to ensure a smooth transition to the new digital tax regime.

Understanding Making Tax Digital for Income Tax Self Assessment (MTD ITSA)

Making Tax Digital for Income Tax Self Assessment represents a pivotal change in how self-employed individuals and landlords manage and report their income tax. It aims to modernise the tax system, making it more efficient, accurate, and easier for taxpayers to keep on top of their affairs digitally. Instead of a single annual tax return, MTD ITSA introduces a more frequent, digital reporting cycle.

What is MTD ITSA?

MTD ITSA requires eligible businesses and landlords to keep digital records of their income and expenses using MTD-compatible software. These records are then used to generate and submit quarterly summaries to HMRC. At the end of the tax year, an End of Period Statement (EOPS) is submitted for each income source, followed by a Final Declaration that consolidates all income, allowances, and reliefs, effectively replacing the traditional Self Assessment tax return. This system is designed to provide taxpayers with a near real-time view of their tax position, helping to avoid last-minute surprises and improve overall tax compliance.

Who Needs to Comply? The Thresholds for 2026 and Beyond

The mandatory start date for MTD ITSA has been revised by HMRC. From April 2026, MTD ITSA will apply to:

Sole traders and landlords with gross income from their business or property exceeding £50,000 in a tax year.

A further expansion is planned for April 2027, when the threshold will be lowered to include those with gross income exceeding £30,000. It is crucial to monitor your gross income to determine your compliance obligations.

Start date	Gross income threshold	Who is affected
April 2026 onwards	£50,000+	Sole Traders and Landlords
April 2027 onwards	£30,000+	Sole Traders and Landlords

There are certain exemptions from MTD ITSA, including individuals who are unable to use digital tools due to age, disability, or geographical location, or those with religious objections. However, most eligible businesses and landlords will need to comply. It is advisable to consult HMRC guidance or a tax professional if you believe you might be exempt.

Key Requirements of MTD ITSA

Compliance with MTD ITSA revolves around four core requirements:

Maintain digital records of income and expenses.
Send quarterly summaries of income and expenses to HMRC using MTD-compatible software.
Submit an End of Period Statement (EOPS) for each income source.
Submit a Final Declaration, replacing the annual Self Assessment tax return.

Digital Record Keeping: This is the foundation of MTD ITSA. All relevant business or property income and expenditure must be recorded digitally. This means no more paper ledgers or manual spreadsheets for those mandated to comply. The software must be capable of storing transactional data in a structured, digital format.

Quarterly Income and Expense Updates: Every three months, a summary of your income and expenses for that period must be sent to HMRC. These are not full tax returns but rather snapshots of your financial activity. The software will calculate these summaries from your digital records and submit them directly to HMRC via a secure API link.

End of Period Statements (EOPS): After the final quarterly update for the tax year, an EOPS must be submitted for each source of income. This allows for any accounting adjustments, such as capital allowances, stock adjustments, or private use adjustments, to be made before the final tax position is calculated.

Final Declaration: This replaces the annual Self Assessment tax return. It consolidates all income streams, includes any other personal income or reliefs not covered in the quarterly updates, and finalises your tax liability for the year. This too must be submitted through MTD-compatible software.

The Role of HMRC-Recognised Software

At the heart of MTD ITSA compliance is the mandatory use of HMRC-recognised software. This software acts as the digital bridge between your business records and HMRC. It must meet specific technical and functional standards set by HMRC to ensure accurate data capture, secure transmission, and adherence to the MTD framework. Without compatible software, compliance with MTD ITSA is simply not possible. This makes selecting the right software a critical decision for affected taxpayers and their agents.

Identifying HMRC MTD-Compatible Software

The term "MTD-compatible software" is not just a marketing label; it signifies that a software product has been tested and approved by HMRC to interact with their MTD systems. This ensures that the software can accurately capture, store, and transmit the required financial data in the correct format.

What Makes Software MTD-Compatible?

MTD-compatible software must possess several key characteristics to meet HMRC's stringent requirements:

Direct API integration with HMRC for submissions.
Comprehensive digital record-keeping capabilities.
Automated calculation and submission of quarterly updates.
Support for End of Period Statements and Final Declarations.
Bank feed integration for automated transaction categorisation.
Secure data storage and compliance with UK regulations.
User-friendly interface for easy navigation and data entry.
Reporting tools for business insights and tax planning.

Essentially, the software must automate the process of translating your day-to-day financial transactions into the format required for MTD submissions, sending them securely and reliably to HMRC.

How to Verify Software Compatibility (HMRC's Software Finder Tool)

HMRC provides an official online tool to help taxpayers and agents find MTD-compatible software. This "software finder" lists all commercial software products that have been recognised by HMRC as meeting the MTD requirements for various taxes, including Income Tax Self Assessment.

Access the HMRC Software Finder: You can find the official list of MTD-compatible software on the UK government's website. Always use this tool as your primary source for verifying software, as it is regularly updated. Go to HMRC Software Finder

When using the tool, ensure you filter for "Income Tax" to see the relevant software options for sole traders and landlords. Look for providers that offer a comprehensive solution for digital record-keeping, quarterly updates, EOPS, and the Final Declaration.

Can Multiple Software Products Be Used? Bridging Software and Integration

HMRC explicitly states that taxpayers can use multiple software products to comply with MTD ITSA, provided they integrate properly. This flexibility is particularly useful for businesses or landlords with complex financial arrangements or those who prefer to use specialised software for certain aspects of their accounting.

One common approach is to use a core accounting software for day-to-day record-keeping and then either:

Integrated Solutions: Use a primary software that has comprehensive MTD ITSA functionality built-in, handling all aspects from record-keeping to submission.
Bridging Software: If you use a spreadsheet or non-MTD-compatible software for your initial record-keeping, you can use "bridging software" to take your digital summary data and submit it to HMRC. Bridging software essentially converts your digital records into an MTD-compliant format and sends it to HMRC via their API. This is a crucial option for those not ready to fully switch their primary accounting system.

The key is ensuring a "digital link" between all parts of your record-keeping and submission process. Manual re-keying of data between different systems is generally not permitted under MTD rules, as it introduces a risk of errors. Therefore, if using multiple products, ensure they can import/export data digitally or link directly.

Important Note on Digital Links: HMRC's guidance on digital links is strict. Any transfer of data between software programs, products, or applications that form part of your functional compatible software must be digital. This means manual input or copy-pasting is not allowed where a digital link is required. Always confirm with your software provider or agent that your chosen setup maintains a fully digital audit trail.

Leading MTD-Compatible Accounting Software Providers for ITSA

The market for MTD-compatible software is robust, with several established providers offering solutions tailored for sole traders and landlords. Here, we examine some of the most prominent options, including AccountsOS, highlighting their MTD ITSA capabilities.

AccountsOS: Streamlined MTD ITSA Compliance

AccountsOS is designed to simplify financial management and MTD ITSA compliance for UK sole traders and landlords. Our platform focuses on intuitive design, automation, and real-time insights to make digital record-keeping and tax submissions as straightforward as possible.

Features for Sole Traders and Landlords: AccountsOS offers dedicated functionalities for both business income and property income. This includes easy categorisation of expenses relevant to each, such as allowable business costs or property maintenance and management fees.
Real-Time Insights and Automation: Our software automates bank reconciliation, intelligently categorises transactions, and provides a real-time view of your income, expenses, and estimated tax liability. This helps prevent year-end surprises and empowers proactive tax planning.
Seamless MTD Submissions: AccountsOS is fully MTD-compatible, enabling direct submission of quarterly updates, End of Period Statements, and the Final Declaration to HMRC, ensuring compliance with minimal manual effort.
Pricing and Support: AccountsOS offers competitive pricing tiers designed to suit businesses of different sizes. Comprehensive support resources, including guides, tutorials, and customer service, are available to assist users with MTD ITSA compliance.

With AccountsOS, you gain a partner dedicated to making your MTD ITSA journey smooth and stress-free, allowing you to focus on your business or property portfolio.

QuickBooks Online for MTD ITSA

QuickBooks Online is one of the most widely used accounting software platforms globally, offering a robust solution for MTD ITSA.

Overview of MTD Features: QuickBooks Online provides comprehensive features for digital record-keeping, including bank feeds for automated transaction import, expense tracking, and invoicing. Its MTD ITSA functionality allows for the direct submission of quarterly updates and the Final Declaration to HMRC.
Suitability for Different Business Sizes: QuickBooks offers various plans, from simple start to advanced, catering to sole traders, small businesses, and growing enterprises. Landlords can manage property income and expenses within the system.
Pricing Tiers: Pricing varies based on the plan chosen, offering different levels of features such as cash flow management, inventory tracking, and multi-currency support.

QuickBooks is known for its extensive features and integrations, making it a powerful choice for those seeking an all-in-one solution.

Xero for MTD ITSA

Xero is another popular cloud-based accounting software, particularly favoured by small businesses and their accountants for its user-friendly interface and strong ecosystem.

Key MTD Functionality: Xero provides tools for digital record-keeping, including bank reconciliation, expense management, and invoicing. It has been updated to support MTD ITSA, allowing for the generation and submission of quarterly updates and the Final Declaration directly to HMRC.
Integration Ecosystem: Xero boasts a vast marketplace of integrated apps, enabling businesses to connect their accounting software with other tools for payroll, CRM, e-commerce, and more.
Pricing Structure: Xero offers several pricing plans, each with varying limits on invoices, bills, and payroll features.

Xero's intuitive design and strong collaboration features make it a strong contender for businesses working closely with their accountants.

Sage Accounting for MTD ITSA

Sage is a long-standing player in the accounting software market, offering a range of products including Sage Accounting, which is MTD-compliant.

MTD-Specific Offerings: Sage Accounting provides features for managing income and expenses, bank feeds, and invoicing. Its MTD ITSA functionality allows users to prepare and submit the necessary quarterly updates and the Final Declaration to HMRC.
Scalability: Sage offers various solutions, from basic accounting for sole traders to more comprehensive packages for larger businesses, ensuring scalability as your business grows.
Pricing and Plans: Sage Accounting comes in different plans, offering features such as cash flow forecasts, advanced reporting, and multi-user access.

Sage provides reliable, feature-rich software backed by extensive experience in the accounting sector.

FreeAgent for MTD ITSA

FreeAgent is particularly popular among freelancers, contractors, and small businesses for its all-in-one approach to accounting, invoicing, and project management.

Focus on Freelancers and Small Businesses: FreeAgent's interface and features are highly geared towards the needs of micro-businesses, simplifying tasks like expense tracking, time tracking, and self-assessment filing.
MTD Features: FreeAgent is MTD ITSA compliant, allowing users to keep digital records, submit quarterly updates, and complete their End of Period Statements and Final Declaration directly through the platform.
Pricing (often via NatWest Group banks): Many users gain access to FreeAgent for free if they bank with NatWest, Royal Bank of Scotland, or Ulster Bank, making it a highly attractive option for eligible customers. Otherwise, standard subscription fees apply.

FreeAgent offers a comprehensive, integrated solution that simplifies financial management for its target audience, with strong MTD capabilities.

Other Recognised MTD Software Options and Bridging Software

Beyond the major players, several other software providers offer MTD ITSA compatible solutions. These include:

KashFlow: Cloud accounting software designed for small businesses.
Zoho Books: Part of the wider Zoho ecosystem, offering comprehensive accounting.
IRIS: Often used by accountants, but also offers client-facing solutions.
Taxfiler / TaxCalc / Capium: Primarily used by tax professionals, but some offer client portals for data entry which then link to MTD submissions.

For those who prefer to maintain their records using spreadsheets or non-MTD-compatible software, bridging software is a vital alternative. This software allows you to input your summarised digital records from your existing system and then submit them to HMRC in an MTD-compliant format. Examples of providers offering bridging software include Absolute Accounting Software, BTCSoftware, and some offerings from the larger tax software suites like TaxCalc.

When considering these options, always verify their MTD ITSA compatibility directly via the HMRC software finder and ensure they meet your specific business needs and budget.

Choosing the Right MTD ITSA Software for Your Business

Selecting the ideal MTD-compatible software is a critical decision that can significantly impact your compliance, efficiency, and overall financial management. It's not a one-size-fits-all solution; the best choice depends on your specific circumstances.

Assessing Your Needs: Sole Trader, Landlord, or Both?

Your primary source of income will heavily influence your software choice.

Sole Traders: Look for software that excels in expense tracking, invoicing, bank reconciliation, and potentially inventory or project management if applicable to your trade. Ease of use for categorising business-specific income and expenses is paramount.
Landlords: Prioritise software that can handle multiple properties, track rental income, manage property-specific expenses (e.g., repairs, agent fees, mortgage interest relief calculations), and potentially integrate with property management tools.
Combined Income: If you are both a sole trader and a landlord, you need software that can effectively manage and separate these distinct income streams for MTD ITSA purposes. AccountsOS, for example, is designed to support both with clear segregation.

Key Considerations When Selecting Software

Beyond basic MTD compliance, consider these factors:

Ease of Use and User Interface: An intuitive interface reduces the learning curve and makes daily record-keeping less burdensome. Try free trials to assess usability.
Cost and Value for Money: Evaluate subscription fees against the features offered. Consider if the time saved and accuracy gained justify the expense. Some providers offer free versions with limited features or discounts for new users.
Features and Functionality: Do you need invoicing, payroll integration, multi-currency support, advanced reporting, or specific industry-related tools? Ensure the software can grow with your business.
Integration Capabilities: Can it connect with your bank accounts for automatic feeds? Does it integrate with other business tools you use, such as payment gateways or CRM systems? Seamless integration is key to maintaining digital links.
Customer Support and Training Resources: Good support is invaluable, especially during the transition to MTD. Look for providers with accessible helpdesks, comprehensive knowledge bases, and user communities.
Scalability for Future Growth: Choose software that can adapt as your business expands or as MTD requirements evolve (e.g., the £30,000 threshold in 2027).
Security and Compliance Standards: Ensure the software protects your financial data with robust security measures and complies with GDPR and other relevant data protection regulations.

The Importance of Professional Advice

If you work with an accountant or tax agent, involve them in your software selection process. They often have preferred software, can offer training, and can help ensure your chosen solution aligns with their working practices and your overall tax strategy. Many accountants are already using MTD-compatible software and can provide valuable insights and support. They can also help you register for MTD ITSA and manage the submission process on your behalf.

Practical Steps for MTD ITSA Compliance with Software

Transitioning to MTD ITSA requires a structured approach. Following these practical steps will help ensure a smooth and compliant journey.

Registering for MTD ITSA

Before you can begin submitting quarterly updates, you must officially register for MTD ITSA with HMRC. This process typically involves:

Having your Government Gateway user ID and password.
Providing your National Insurance number.
Confirming your business start date.
Specifying your accounting period.

Once registered, HMRC will be aware that you will be submitting your tax information digitally via MTD-compatible software. It is crucial not to sign up until you have MTD-compatible software in place and are ready to start keeping digital records. If an agent is handling your tax affairs, they can register you for MTD ITSA.

Setting Up Your Chosen Software

After selecting your MTD-compatible software, the setup phase is critical:

Connect Bank Accounts: Link your business bank accounts for automated transaction imports. This is a cornerstone of efficient digital record-keeping.
Categorise Income and Expenses: Set up appropriate categories for your business or property income and expenses. Most software will have default categories, but you may need to customise them to accurately reflect your operations and allowable deductions.
Opening Balances: If you are transitioning from another system, enter your opening balances for assets, liabilities, and equity to ensure your financial records are accurate from the start.
Authorise Software with HMRC: Your software will guide you through connecting directly to HMRC's MTD API, requiring your Government Gateway credentials. This authorises the software to submit data on your behalf.

Digital Record Keeping: Best Practices

Effective digital record-keeping is the backbone of MTD ITSA.

Income Recording: Record all income as it occurs. This includes sales revenue for sole traders or rental income for landlords. Ensure each entry includes the date, amount, and a clear description.
Expense Recording: Capture all business or property-related expenses. Use the software's features to upload receipts or link them to transactions. Categorise expenses accurately to maximise allowable deductions.
Capital Allowances and Adjustments: Your software should facilitate the tracking of capital assets and the calculation of capital allowances, which are crucial for your End of Period Statement.
Regular Reconciliation: Regularly reconcile your bank accounts within the software. This ensures that all transactions are accounted for and correctly categorised, preventing discrepancies.

Submitting Quarterly Updates: A Step-by-Step Guide

Quarterly updates are summaries of your income and expenses for specific periods. They are due by the 5th of the month following the end of each tax quarter.

Review Records: Before submission, review all income and expense entries for the quarter to ensure accuracy and correct categorisation.
Generate Summary: Your MTD-compatible software will automatically generate a summary of your income and expenses for the relevant quarter based on your digital records.
Make Adjustments (if any): While quarterly updates are primarily summaries, your software may allow minor adjustments before submission.
Submit to HMRC: Use the software's dedicated MTD submission function to send the quarterly update directly to HMRC. You will receive confirmation of successful submission.

Worked Example: A Sole Trader's First Quarterly Update. Alice, a freelance graphic designer, starts her MTD ITSA reporting period from April 6, 2026. Her first tax quarter ends on July 5, 2026.

April 6 - July 5: Alice diligently records all her invoices (income) and business expenses (software subscriptions, travel, stationery) in AccountsOS.
July 5: AccountsOS automatically compiles a summary of her income and expenses for this period.
By August 5: Alice logs into AccountsOS, reviews the generated summary, makes any final checks, and clicks 'Submit' to send her first quarterly update directly to HMRC. AccountsOS provides instant confirmation.

This process will repeat for subsequent quarters, with deadlines on November 5, February 5, and May 5 (for the tax year ending April 5).

Completing Your End of Period Statement (EOPS)

After the final quarterly update for the tax year (which ends April 5), you must submit an EOPS for each business or property income source. This is typically due by January 31 following the tax year.

Annual Adjustments: The EOPS is where you apply annual accounting adjustments that couldn't be included in quarterly updates. This might include capital allowances, stock adjustments, accruals, prepayments, or adjustments for private use of assets.
Software Assistance: MTD-compatible software will guide you through these adjustments, ensuring they are correctly applied to your annual figures.
Submission: Once prepared, the EOPS is submitted to HMRC via your software.

Making Your Final Declaration

The Final Declaration is the last step in the MTD ITSA process, replacing your traditional Self Assessment tax return. It is due by January 31 following the tax year.

Consolidation: Your software will pull together all the information from your quarterly updates and EOPS, along with any other income (e.g., employment income, dividends, savings interest) or reliefs (e.g., pension contributions) that need to be declared.
Tax Calculation: The software will calculate your final income tax and National Insurance contributions liability for the year.
Review and Submit: You will review the consolidated figures and the final tax calculation before submitting the Final Declaration to HMRC.

This streamlined process, facilitated by MTD-compatible software, aims to provide greater clarity and control over your tax obligations throughout the year.

Penalties for Non-Compliance and Avoiding Them

HMRC has introduced a new points-based penalty system for MTD ITSA to encourage timely and accurate submissions. Understanding these penalties is crucial for compliance.

Late Submission Penalties (Points-Based System)

For each missed quarterly update, EOPS, or Final Declaration, you will receive a penalty point. Once a certain threshold of points is reached within a defined period, a financial penalty is triggered.

Points Threshold: The threshold for incurring a financial penalty is 4 points for those submitting quarterly, 2 points for those submitting annually, and 5 points for partnerships.
Financial Penalty: Once the threshold is met, a £200 financial penalty is issued.
Point Expiry: Points expire after 24 months, provided all submissions for that tax year have been made.

This system is designed to be more proportionate than previous penalty regimes, giving taxpayers a chance to correct occasional errors without immediate heavy fines. However, consistent late submissions will quickly lead to penalties.

Late Payment Penalties

Separate penalties apply for late payment of tax. Interest is also charged on unpaid amounts from the due date until the date of payment.

First Penalty: A 2% penalty if tax is 30 days late, rising to 4% if 6 months late, and 5% if 12 months late.
Interest: Interest is charged on any overdue tax from the payment due date.

How AccountsOS Helps Prevent Penalties

AccountsOS is built with MTD ITSA compliance at its core, offering features specifically designed to help you avoid penalties:

Automated Reminders: Our system provides timely notifications for upcoming quarterly update deadlines, EOPS, and the Final Declaration, ensuring you never miss a submission.
Real-Time Tax Estimates: By keeping your records up-to-date, AccountsOS offers a live estimate of your tax liability, allowing you to budget and set aside funds, thereby preventing late payment penalties.
Simplified Digital Record-Keeping: The intuitive interface and automated categorisation features make it easier to maintain accurate digital records, reducing the risk of errors that could lead to penalties.
Direct HMRC Submissions: AccountsOS facilitates direct, secure submission of all required MTD ITSA data to HMRC, reducing the chance of technical errors or delays.

Scenario	Penalty
Late quarterly submission	Points-based system, leading to financial penalties.
Late End of Period Statement	Points-based system, leading to financial penalties.
Late Final Declaration	Points-based system, leading to financial penalties.
Inaccurate records/submissions	Potential for financial penalties.

The Future of MTD: Beyond 2026

Making Tax Digital is an ongoing programme, and the changes for Income Tax Self Assessment are just one part of HMRC's broader vision for a fully digital tax system.

The £30,000 Threshold from April 2027

While April 2026 marks the start for those with income over £50,000, it is crucial to remember that MTD ITSA will extend to a wider group of taxpayers from April 2027. From this date, sole traders and landlords with gross income from their business or property exceeding £30,000 will also be mandated to comply. This means a significant increase in the number of individuals needing MTD-compatible software. Early adoption or preparation is highly recommended, even if you currently fall below the £50,000 threshold, to ensure a smooth transition when the time comes.

What About Limited Companies? MTD for Corporation Tax

Currently, MTD for Corporation Tax (MTD CT) is in a pilot phase, and a mandatory start date has not yet been announced. However, it is HMRC's intention to eventually extend MTD to limited companies. This will likely involve similar principles of digital record-keeping and potentially quarterly reporting for Corporation Tax purposes. Businesses operating as limited companies should keep an eye on HMRC announcements and ensure their accounting practices are adaptable to future digital changes. Many of the MTD-compatible software providers for ITSA also offer solutions for Corporation Tax, making the transition potentially smoother when MTD CT becomes mandatory.

Conclusion: Embracing Digital for Tax Efficiency

The move to Making Tax Digital for Income Tax Self Assessment from April 2026 is a significant change, but it also presents an opportunity for sole traders and landlords to streamline their financial management. By adopting HMRC-compatible accounting software, you can ensure compliance, gain real-time insights into your finances, and ultimately make managing your tax affairs more efficient and less stressful.

HMRC's urging for agents and taxpayers to verify software compatibility highlights the importance of early preparation. Whether you choose a comprehensive solution like AccountsOS, or opt for a combination of software and bridging tools, the key is to ensure your chosen setup maintains a fully digital audit trail and can seamlessly communicate with HMRC's MTD systems. Embrace the digital transformation now to secure a compliant and efficient financial future for your business or property portfolio.

Simplify Your MTD ITSA Compliance with AccountsOS

AccountsOS provides an intuitive, MTD-compatible platform designed to make digital record-keeping and quarterly submissions effortless for sole traders and landlords.

Automated bank feeds and transaction categorisation.
Real-time visibility of your income, expenses, and tax liability.
Direct submission of quarterly updates and Final Declaration to HMRC.
Dedicated support for sole traders and landlords.

MTD ITSA Reporting Cycle

Step	Frequency
Digital Record Keeping	Ongoing
Quarterly Updates	4 times a year
End of Period Statement	Once a year
Final Declaration	Once a year

All submissions via MTD-compatible software.

AccountsOS: Your Partner for MTD ITSA Compliance

We make MTD ITSA simple, accurate, and penalty-free.

Automated Digital Records

Connect your bank accounts for automatic transaction feeds and intelligent categorisation, ensuring all your income and expenses are digitally recorded.

Effortless Quarterly Updates

Generate and submit your quarterly income and expense summaries directly to HMRC with just a few clicks, well ahead of deadlines.

Accurate EOPS & Final Declaration

AccountsOS helps you compile your End of Period Statements and Final Declaration, incorporating all necessary adjustments and reliefs.

Real-Time Tax Position

Always know your estimated tax liability, allowing for better financial planning and avoiding last-minute payment shocks.

Deadline Reminders

Receive timely notifications for all MTD ITSA submission deadlines, helping you avoid late filing penalties.

Support for Sole Traders & Landlords

Tailored features and support for managing both business and property income, ensuring compliance for all your income streams.

Frequently asked questions

Do I have to use MTD-compatible software if my income is below the threshold?

No, if your qualifying income is below £50,000 (from April 2026) or £30,000 (from April 2027), MTD ITSA is not mandatory for you. However, many choose to adopt it voluntarily for the benefits of digital record-keeping and streamlined tax management.

Can I use spreadsheets for MTD ITSA?

You can use spreadsheets for recording your data, but you must combine them with 'bridging software' to submit your quarterly updates and other declarations to HMRC. The bridging software acts as the digital link, converting your spreadsheet data into an MTD-compliant format for submission.

What if I have multiple income streams, for example, a sole trader business and rental properties?

You must keep digital records and submit quarterly updates for each separate income source. Your MTD-compatible software should be capable of managing and reporting on these distinct income streams. AccountsOS, for instance, supports both sole trader and landlord income.

How often do I need to update my digital records?

While quarterly updates are submitted to HMRC, best practice dictates updating your digital records regularly, ideally weekly or monthly. This ensures accuracy, makes quarterly submissions easier, and provides a real-time view of your financial position.

What happens if I make a mistake in a quarterly update?

MTD-compatible software allows you to make corrections to previous quarterly updates. HMRC understands that errors can occur, and the system is designed to allow for adjustments to be made in subsequent submissions or via an amended EOPS or Final Declaration.

Will my accountant still be able to help me with my tax?

Absolutely. Most accountants are already preparing for MTD ITSA and can use MTD-compatible software themselves or work with your chosen software. They can manage your submissions, provide advice, and ensure all your tax affairs are handled correctly under the new regime.

What kind of records do I need to keep digitally?

You need to digitally record all your business or property income and expenses. This includes the date, amount, and category of each transaction. While you don't typically need to submit scanned receipts to HMRC, your software should allow you to attach digital copies of invoices and receipts for your own records.

When should I start preparing for MTD ITSA?

HMRC urges agents and taxpayers to start preparing now. Even if your mandatory start date is April 2026 or April 2027, familiarising yourself with MTD-compatible software and digital record-keeping practices ahead of time will ensure a smooth transition and minimise stress.