MTD software is becoming one of the most important tools for accountants, bookkeepers and tax advisers as MTD for Income Tax Self Assessment (ITSA) approaches. With new HMRC rules requiring digital recordkeeping and quarterly updates from 6 April 2026 for higherincome taxpayers, understanding MTD software options and requirements is essential for practices that want to remain compliant and efficient.
This guide explains what MTD software needs to do under the new ITSA regime, how the rollout is phased and why tools like FigsFlow matter as part of an integrated compliance workflow.
What Is MTD for ITSA
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is a major expansion of HMRC’s digital tax reporting framework. Under the new regime, selfemployed individuals and landlords with qualifying income will need to keep digital records and submit quarterly summaries of income and expenses to HMRC.
To meet these requirements, taxpayers and their agents must use MTD software that can:
- Maintain digital records of income and expenses
- Submit quarterly updates to HMRC
- Produce a final declaration at yearend
- Support digital links between systems and records, as required under MTD regulations
Without HMRCrecognised MTD software, submissions will not be compliant, and traditional paper returns will no longer be accepted.
Phased Rollout of MTD for ITSA and Software Adoption
The introduction of MTD software requirements for ITSA is being phased in over several years:
- From 6 April 2026, sole traders and landlords with annual income above £50,000 must use MTD software to submit quarterly digital updates.
- From 6 April 2027, that threshold is expected to decrease to taxpayers with income above £30,000.
- From 6 April 2028, the threshold will drop further to £20,000.
- Rules may eventually extend further, potentially covering lower income thresholds in later years.
These phased deadlines mean that accountants, bookkeepers and tax advisers must plan now for how MTD software will fit into client workflows, training and compliance checks to avoid lastminute disruption.
Key Features to Look for in MTD Software
With several MTD software products on the market, choosing the right one can be confusing. The best MTD software should include:
- HMRC Compatibility: Software must be recognised by HMRC for ITSA submissions.
- Digital RecordKeeping: Maintain digital ledgers that link directly to HMRC’s APIs.
- Quarterly Reporting Tools: Automated workflows for submitting quarterly updates.
- Final Declaration Support: Ability to generate Final Declarations and finalise tax obligations electronically.
- Multiple Income Sources: Flexible handling of selfemployment, property income, and other combines.
Using MTD software that meets these criteria ensures compliance with MTD for ITSA and saves time during tax cycles.
How FigsFlow Supports Your MTD Software Workflow
While MTD software focuses specifically on digital submissions to HMRC, accounting practices need broader workflow tools to manage the overall compliance process efficiently. This is where FigsFlow fits in.
FigsFlow doesn’t replace MTD software. Instead, it complements it by streamlining the surrounding tasks that often burden practices:
- Client Onboarding: Automatically generate engagement letters and collect client information before setting up MTD software for quarterly updates.
- Document Management: Securely store client tax data, communication records, and supporting documents that tie into MTD software submissions.
- Client Collaboration: Easily share documents and requests with clients, minimising delays that could disrupt quarterly reporting cycles.
- Compliance Tracking: Maintain timelines and evidence for all digital filing deadlines associated with MTD software, keeping firms ahead of regulatory checks.
By combining MTD software for submissions with FigsFlow for workflow harmony, accounting firms create a more complete and efficient compliance ecosystem.
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