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MTD for Income Tax pilot now live

HMR­C’s pilot scheme for Mak­ing Tax Dig­i­tal for Income Tax Self Assess­ment (MTD for ITSA) is now live.

Accoun­tants, agents and indi­vid­u­als are able to sign up to the pilot and test the pro­gramme out. The pilot aims to assess the MTD for ITSA report­ing envi­ron­ment, with an ini­tial focus on those who are self-employed and land­lords with annu­al income exceed­ing £50,000. Sign­ing up to MTD for ITSA will become manda­to­ry for indi­vid­u­als with income in excess of this thresh­old from 6 April 2026.

Those sign­ing up to the pilot will be required to keep dig­i­tal records and sub­mit quar­ter­ly updates on their income and expen­di­ture to HMRC via MTD-com­pat­i­ble soft­ware so that HMRC may test and devel­op the sys­tem.

How­ev­er, after HMRC revised its list of soft­ware prod­ucts that sup­port MTD for ITSA only five are avail­able for the pri­vate beta test­ing of MTD for ITSA.

These are:

  • 1 2 3 Sheets Ltd
  • Intu­it Quick­Books Online
  • Sage Account­ing
  • SE reports
  • self assess­ment direct.

Cho­sen soft­ware must be able to cre­ate and store dig­i­tal records of busi­ness income and expens­es, send quar­ter­ly updates, receive infor­ma­tion from HMRC and make your final dec­la­ra­tion by 31 Jan­u­ary as part of the sub­mis­sion of tax returns.

HMRC rec­om­mends check­ing with the soft­ware providers when choos­ing soft­ware to ensure it suits busi­ness­es’ needs.

Car­o­line Miskin, Senior Tech­ni­cal Man­ag­er at the Insti­tute of Char­tered Accoun­tants in Eng­land and Wales (ICAEW), said:

‘Choos­ing the right soft­ware is a crit­i­cal deci­sion. Soft­ware prod­ucts do need to com­ply with HMR­C’s min­i­mum func­tion­al stan­dards but these are quite min­i­mal. This means there will be very sig­nif­i­cant dif­fer­ences between prod­ucts.

‘Cost is obvi­ous­ly a major con­sid­er­a­tion. The list includes some free prod­ucts, but it is impor­tant to check the terms and con­di­tions as well as what func­tion­al­i­ty is offered. It is dis­ap­point­ing that a wider range of soft­ware is not yet avail­able.’

Inter­net link: GOV.UK