MTD ITSA: Time vs Money – What's the Best Balance?

If you're a sole trader or landlord, you’ve probably heard whispers (or full-on panic) about Making Tax Digital for Income Tax Self Assessment—or MTD ITSA for short. While it might sound like another HMRC acronym to file away and forget, this one’s worth paying attention to. It’s going to change how you manage your accounts from April 2026, and now’s a great time to start thinking about what that will mean for you.

One of the key questions business owners are starting to ask is: Do I want to save money and do more myself, or save time and pay someone to help me? Let’s break it down.

A Quick MTD ITSA Recap

From April 2026, self-employed individuals and landlords earning over £50,000 per year will need to:

• Keep digital records of income and expenses

• Send quarterly updates to HMRC via compatible software

• Submit an end-of-year final declaration

From April 2027, this extends to those earning over £30,000.

The goal is to make tax more efficient, reduce errors, and give you (and HMRC) a more up-to-date view of your business finances. But while the benefits are clear, the day-to-day reality means more frequent bookkeeping and a few new responsibilities to stay on top of.

Option One: Save Money by Doing It Yourself

For some sole traders and landlords, handling everything in-house might feel like the most cost-effective option. If you’ve got the time—and the confidence—it’s absolutely possible to manage MTD ITSA yourself.

What You’ll Need:

• MTD-compatible software (like QuickBooks, Xero, FreeAgent or similar)

• A method for recording your income and expenses digitally—ideally by linking your bank accounts

• Confidence in categorising your income and costs correctly

• Time set aside every quarter to prepare and submit updates

Pros:

• Cheaper overall—you’re not paying a bookkeeper or accountant regularly

• You stay very close to your numbers, which can help with budgeting and business planning

Cons:

• It takes time and discipline to keep up with regular entries

• There’s a learning curve with the software

• Mistakes can be costly—penalties for late or incorrect submissions do apply

  
  

Option Two: Save Time by Outsourcing

If time is your most valuable resource (or bookkeeping just isn’t your thing), outsourcing may be the better path. Working with a bookkeeper or accountant means your records are kept up-to-date, your submissions are handled professionally, and you can focus on running your business.

What You’ll Get:

• Someone to keep your records tidy and MTD-compliant

• Quarterly submissions handled for you

• Advice and support along the way—particularly helpful if things change

• Peace of mind that HMRC is getting the right numbers at the right time

Pros:

• Time-saving—focus on your work, not your paperwork

• Accuracy and compliance—especially useful if you’re not confident with digital tools

• You get a trusted expert in your corner who can offer advice and support

Cons:

• It will cost more than DIY, though many find the time-saving worth every penny

• You’ll still need to share your documents regularly—outsourcing doesn’t mean ignoring your finances completely

  
  

Option Three: Meet in the Middle – The Best of Both Worlds?

Not ready to hand everything over, but don’t want to go it alone either? There’s a third way.

Some business owners are choosing a quarterly review service, where you handle the day-to-day record-keeping but a bookkeeper reviews your records each quarter before submission.

At Bay Bookkeeping Solutions, we offer this kind of support to clients who want a bit of backup without the full monthly cost. It means:

• You stay in control of your records

• You reduce the chance of errors

• You get expert input before your quarterly updates go to HMRC

It’s a great way to balance the books—literally and figuratively.

What Else to Consider?

Whichever route you choose, here are a few things to keep in mind:

1. Start early

Getting used to MTD software now means you won’t be scrambling in 2026. Many platforms offer trial periods so you can see what fits.

2. Don’t leave quarterly updates until the last minute

Even if you’re doing it yourself, try to get into a routine. Set a date each month to do your books and avoid a quarterly panic.

3. Know your limits

If you’re spending hours struggling with bookkeeping, is that time better spent on your actual business? Sometimes paying for help is an investment, not a cost.

4. Choose software wisely

Make sure it's MTD-compliant and suits your business. Some are better for property, others for product-based sales, and some are free with certain bank accounts.

Final Thoughts

MTD ITSA is coming—and it’s going to change how you manage your taxes. Whether you’re leaning towards doing it yourself, hiring help, or finding a sweet spot in between, the most important thing is to plan ahead.

At Bay Bookkeeping Solutions, we work with all kinds of clients—from hands-on DIYers to hands-off business owners—and we’re here to support you in whichever way works best for your setup.

Whether it’s a full bookkeeping service, a quarterly check-in, or just some advice on software, you don’t have to face MTD alone. Remember, whatever choice you make, it’s all about finding a balance that works for you.