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