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MTD for ITSA with BrightBooks – Overview

Shannon Brady
  • Updated

Making Tax Digital for Income Tax (MTD for ITSA) with BrightBooks

 

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is HMRC’s programme to modernise tax reporting for UK sole traders and landlords. It requires:

  • Digital record keeping of income and expenses
  • Quarterly updates to HMRC
  • A final declaration at the end of each tax year
 

MTD for ITSA applies to UK taxpayers whose qualifying income (combined gross income from self‑employment and property) exceeds HMRC’s thresholds. The current planned rollout is:

  • From 6 April 2026 – qualifying income over £50,000
  • From 6 April 2027 – qualifying income over £30,000
  • From 6 April 2028 – qualifying income over £20,000
 

BrightBooks is HMRC‑recognised, MTD‑compatible bookkeeping software that supports the quarterly part of this journey. With BrightBooks, you can:

  • Record income and expenses digitally
  • Submit your quarterly updates to HMRC directly from the software
  • Use BrightBooks as:
    • Full bookkeeping software, or
    • A bridging tool if you keep records in spreadsheets and need MTD submissions
 

What BrightBooks does for MTD ITSA

BrightBooks is used by:

  • Self‑employed trading businesses
  • UK property businesses (landlords with UK rental income)
  • Foreign property businesses (landlords with overseas rental income)
 

It provides:

  • MTD ITSA quarterly update screens for:
    • Self‑employment
    • UK property
    • Foreign property
  • Excel bridging templates for:
    • Self‑employment quarterly returns
    • UK property quarterly returns
  • The ability to work from:
    • Direct bookkeeping in BrightBooks
    • Imported spreadsheet data
 

You can also use BrightBooks alongside other tax software for the final declaration; BrightBooks itself handles the digital records and quarterly updates part of MTD.

 

Digital record‑keeping in BrightBooks

MTD requires digital records of:

  • Income (sales, takings, rental income)
  • Expenses (purchases, overheads, property costs)
  • Bank transactions and other supporting financial data
 

Records can be kept in:

  • BrightBooks
  • Other accounting software
  • Spreadsheets, as long as they are connected to HMRC using bridging or MTD‑recognised software
 

BrightBooks helps you:

  • Keep digital records in a structured way
  • Pull those records into quarterly MTD updates
  • Reduce manual re‑keying and duplication
 

Quarterly updates vs final declaration

  • Quarterly updates:
    • Sent every 3 months via MTD‑compatible software
    • Summaries of income and expenses, not full tax returns
    • Provide an in‑year view for HMRC and help keep records up to date
  • Final declaration:
    • Submitted after the end of the tax year
    • Brings together all income and expenses and any year‑end adjustments
    • Replaces the annual Self Assessment return for income sources within MTD
 

BrightBooks supports the quarterly submissions. The final declaration itself is completed in tax software that connects to HMRC.

 

For more background and resources on MTD for Income Tax, see Bright’s MTD hub by clicking here.