Capium - Volunteering for MTD ITSA Pilot Scheme: What You Need to Know

The digital landscape of tax reporting in the UK is about to undergo a significant transformation as HM Revenue and Customs (HMRC) announces the launch of the Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) pilot scheme. This initiative marks a crucial step forward in HMRC’s efforts to modernise tax administration and streamline processes for taxpayers and accountants alike. 

What is MTD for ITSA? 

MTD for ITSA is part of HMRC’s wider Making Tax Digital initiative, which aims to digitise tax reporting and make it more efficient, accurate, and easier for taxpayers to manage. Specifically, MTD for ITSA will require self-employed individuals and landlords with annual business or property to keep digital records and use compatible software to send quarterly updates to HMRC, followed by an end-of-year final declaration. 

For individuals, MTD for ITSA will be introduced in two phases: 

• From April 2026, for those with qualifying income over £50,000 

• From April 2027, for those with qualifying income over £30,000 

Visit the HMRC website for more information. 

What Accountants Need to Know 

Accountants play a crucial role in guiding their clients through these changes and ensuring compliance with HMRC regulations. Here’s what accountants need to know about the MTD for ITSA pilot scheme: 

Pilot Scheme Launch: HMRC’s announcement signals the beginning of the pilot scheme for MTD for ITSA, which began on the 22nd of April 2024. This pilot phase allows selected participants to test the new system before it becomes mandatory for all eligible taxpayers.  

Benefits for Accountants: Participating in the pilot scheme offers accountants several advantages. It provides an opportunity to familiarise themselves with the new digital processes, identify any potential challenges, and streamline their workflows for future compliance. Additionally, early involvement allows accountants to better support their clients through the transition. 

The Process: During the pilot phase, selected participants will be required to use compatible software to keep digital records of their income and expenses. They will then submit quarterly updates to HMRC through the designated digital channels. 

Volunteering for the Pilot Scheme

Accountants can participate in the MTD for ITSA pilot scheme, gaining early access to the new system and helping shape its development. By volunteering for the pilot scheme, accountants can familiarise themselves with the new processes, identify any challenges, and provide valuable feedback to HMRC.

Qualification criteria: For more information, you can refer to Tom Herbert’s informative piece on AccountingWEB, or visit the HMRC website to learn more about the criteria to qualify for the pilot scheme. 

Software Compatibility: Accountants must ensure they have access to compatible software that supports MTD for ITSA reporting. Choosing the right software provider is essential to ensure a smooth transition to digital tax reporting – Visit the HMRC website to view the list of compatible software.  

Client Education and Support: As trusted advisors, accountants should proactively educate their clients about MTD for ITSA requirements and help them prepare for the transition. This may involve providing training on using digital record-keeping software, explaining quarterly reporting obligations, and offering ongoing support throughout the process. 

How to Get Involved 

Capium, a leading provider of accounting software, is inviting its customers to volunteer for the MTD for ITSA pilot scheme. By participating in the pilot with Capium software, accountants can gain early access to MTD for ITSA functionality, explore its features, and contribute to its refinement. 

To volunteer for the MTD for ITSA pilot scheme with Capium cloud software, sign up today and our team will contact you. 

Embracing the Future of Tax Compliance 

As the digital landscape continues to evolve, embracing innovations like MTD for ITSA is essential for accountants to stay ahead of the curve. By actively participating in the pilot scheme, accountants can play a pivotal role in shaping the future of tax administration while positioning themselves as trusted advisors to their clients. 

HMRC’s announcement of the MTD for ITSA pilot scheme launch represents a significant milestone in the journey towards modernising tax processes. Accountants are encouraged to seize this opportunity to engage with the new digital framework and leverage innovative solutions like Capium Software to navigate the evolving landscape of tax compliance with confidence.