Reporting under MTD: Will you need to submit monthly reports?

As an accountant, you must keep up to date with any changes that could affect your clients. But, unless you’ve worked with VAT-registered clients with a taxable turnover of more than £85,000 a year, you might not be familiar with Making Tax Digital (MTD).

Whether you’re already aware of the government’s new scheme or not, you should get up to speed soon, as MTD for Income Tax Self Assessment (ITSA) is due to roll out from April 2026. 

In this article, we’ll run through who’ll be affected by the new rules. Then, we’ll look at the new MTD reporting requirements and show you how to make sure your clients are compliant.

Who will be affected by Making Tax Digital for Income Tax Self Assessment?

Under MTD for ITSA, four million taxpayers will need to change how they report their earnings to HMRC. The new extension applies to everyone who fills out a Self Assessment tax return.

This includes: 

• the self-employed

• partners in limited partnerships

• landlords making £50,000 a year or more in rental income from April 2026 and £30,000 or more from April 2027

Under the new rules, anyone in any of these categories will need to submit quarterly reports for each trade and property business they own, in addition to end-of-period and year-end finalisations. 

Reporting requirements under MTD for ITSA

Under MTD for ITSA, clients will need to provide the following reports: 

• Quarterly reports

• End-of-period statements (EOPS)

• Finalisation statements

• Quarterly updates for property businesses

That’s a lot of requirements. But, thankfully, they aren’t too complicated. Quarterly reports should include all relevant income and expenses. The rules are the same for quarterly updates for property businesses. Tax estimates will be returned into QuickBooks from HMRC, based on this data.

An EOPS is similarly self-explanatory: it’s a final statement of total turnover for the end of each accounting period. This final statement will replace the current annual Self Assessment return, but it must be completed in addition to the four quarterly reports, making a total of five reports per tax year. 

The finalisation statement, also known as the crystallisation statement, brings together all the information included in the MTD reports, as well as other taxable income, to calculate overall tax liability for the year.

These reports must be submitted for each individual trading or property business that the taxpayer operates.

To make sense of these requirements, let’s apply them to a hypothetical example. 

John is a self-employed businessman. He makes his business accounts up to 30 April. 

John submits his quarterly returns as follows: 

• First quarter: end of April. 

• Second quarter: end of July. 

• Third quarter: end of October. 

• Fourth quarter: end of January. 

John also lets out two residential properties: one as a long-term let, and the other as furnished holiday accommodation. 

Given all this, his reporting requirements would be as follows: 

Start dates for MTD for ITSA

Announced in July 2020, and amended at various points, the starting dates for MTD for ITSA are as follows: 

• Existing trading income: first accounting period starting in or after 6 April 2026

• Existing property income: 6 April 2026

• New trading business: start of accounting period in year three

• New property business: 6 April following the start date

How QuickBooks can help your clients 

If you’re concerned your clients may be still confused, then have no fear. QuickBooks is here to help you through the process. Our MTD software could future-proof accounting by combining some MTD reports into a single submission, so you can rest easy knowing that your clients are equipped to comply with whatever MTD throws at them.

Sign up to QuickBooks’ MTD software for accountants to access discounted QuickBooks Online subscriptions for your clients. 

We hope you found this article helpful. The new MTD for ITSA requirements have the potential to be quite burdensome, and it’s crucial that accountants are aware of them and ready to adapt well before the changes come into force. But with QuickBooks software, you can give your clients whatever they need to stay compliant.