Making Tax Digital for Self Assessment: Quietly Transformational
January 4, 2026
Introduction
While reforms such as the abolition of the non-dom regime and the expansion of third-party reporting attract most attention, Making Tax Digital for Income Tax Self Assessment (MTD-ITSA) may prove to be one of the most structurally important changes to the UK tax system of the decade.
Unlike headline rate changes, MTD-ITSA does not alter what is taxed or how much tax is paid. Instead, it changes how and when information is reported to HMRC, with significant consequences for compliance behaviour, error detection, and long-term enforcement.
What MTD-ITSA actually does
MTD-ITSA replaces annual reporting for certain income streams with a digital, periodic reporting framework. Specifically, it applies only to:
- Trading income (sole traders and, in due course, partnerships); and
- UK property income, including residential and commercial lettings.
Where a taxpayer’s combined gross income from these sources exceeds the relevant threshold, they are required to submit:
- Quarterly digital updates of income and expenses;
- An End of Period Statement (EOPS); and
- A Final Declaration, which replaces the traditional Self Assessment return for those income sources.
Importantly, quarterly updates are not tax returns and do not create tax liabilities. They are informational submissions designed to improve accuracy and timeliness.
What MTD-ITSA does not cover
MTD-ITSA does not apply to:
- Employment income;
- Pension income;
- Dividend or interest income;
- Capital gains.
These income types remain within the annual Self Assessment system and continue to be reported on a once-per-year basis.
This distinction is fundamental to understanding both the scope and limits of MTD-ITSA.
Interaction with crypto and other investment activity
This is an area where confusion frequently arises.
Most UK crypto holders are taxed as investors, meaning their activity falls within Capital Gains Tax. In those cases:
- Crypto gains remain outside MTD-ITSA; and
- Reporting continues to take place annually through Self Assessment.
MTD-ITSA becomes relevant to crypto only where an individual’s activity amounts to trading for tax purposes. In such cases, the profits are taxed as trading income and fall within MTD-ITSA because they are trading profits, not because they relate to cryptoassets.
In other words, crypto is incidental. The same treatment would apply to any other form of trading income.
Why MTD-ITSA still matters systemically
Although MTD-ITSA is limited in scope, its broader significance lies in how it reshapes compliance dynamics.
Quarterly digital reporting:
- Shortens HMRC’s detection cycle;
- Reduces the scope for long-running errors; and
- Encourages earlier engagement with tax positions.
When combined with wider third-party reporting regimes, this creates a more connected compliance environment – even though the underlying legal regimes remain distinct.
Conclusion
MTD-ITSA is not a universal reporting system and it does not pull investment income or capital gains into quarterly reporting. It is a targeted reform focused on trading and property income, designed to modernise reporting rather than expand the tax base.
Understanding where it applies – and where it does not – is essential for accurate compliance and sensible planning.
Final thoughts
MTD-ITSA should be approached as an operational change, not a substantive tax reform. For most investors, including crypto investors, it will have no direct impact at all. For traders and property landlords, however, it represents a fundamental shift in how tax compliance is managed.
Call to action
If you have trading or property income, review whether and when MTD-ITSA will apply to you, and ensure your systems and processes are capable of supporting quarterly digital reporting.
If you have any queries about MTD or other UK or UAE tax matters then please get in touch.
Navigating the UAE Employment Visa Process in 2026 Relocating to the United Arab Emirates for employment offers significant professional and financial opportunities. However, the UAE employment visa process is structured, compliance-driven and time sensitive. Understanding each stage in advance avoids unnecessary delays and protects both employer and employee from regulatory issues. Below is a comprehensive, easy-to-follow guide to the UAE employment visa process as it stands in 2026. Step 1: Securing a Confirmed Job Offer The UAE employment visa process begins with a formal job offer from a UAE-licensed entity. Only an employer registered with the relevant mainland authority or free zone authority can sponsor an employee. The employer becomes the visa sponsor and assumes legal responsibility for: Applying for the work permit Processing the residence visa Ensuring compliance with UAE labour law Covering government application fees (in most cases) Employees cannot independently apply for a standard employment visa without sponsorship. Step 2: Work Permit Application (Entry Permit Approval) Once the employment contract is signed, the employer applies for a work permit (also known as a labour approval) through the Ministry of Human Resources and Emiratisation (MOHRE) or the relevant free zone authority. Documents typically required include: Passport copy (valid for at least six months) Passport-size photographs Signed employment contract Attested educational certificates (if required for the role) If the employee is outside the UAE, an entry permit is issued, allowing them to enter the country legally for employment purposes. If the employee is already inside the UAE on a visit visa, status adjustment procedures apply. Step 3: Entry to the UAE (If Applying From Abroad) For applicants outside the UAE, the entry permit allows legal entry into the country. Once inside the UAE, the individual must complete the residency formalities within the validity period of the entry permit (usually 60 days). Timing is critical at this stage. Failure to complete the process within the permitted window may result in fines. Step 4: Medical Fitness Test All employment visa applicants must undergo a mandatory medical examination at an approved UAE medical centre. The test typically screens for: HIV Tuberculosis Hepatitis (in certain categories) The medical fitness certificate is a mandatory component of the residence visa application. Processing time: usually 24–72 hours depending on service speed selected. Step 5: Emirates ID Biometrics The applicant must apply for an Emirates ID, which serves as the UAE’s official identification card. This process includes: Biometric data capture (fingerprints and photograph) Identity verification The Emirates ID is linked directly to the residence visa and is essential for: Opening bank accounts Renting property Obtaining a driving licence Accessing utilities and telecom services Step 6: Residence Visa Stamping Following medical clearance and Emirates ID application, the residence visa is issued and stamped electronically against the passport record. Employment residence visas are typically valid for: 2 years (mainland companies) 2–3 years (depending on free zone authority) Once issued, the employee is legally resident in the UAE and may sponsor eligible dependants (subject to salary thresholds). Key Considerations in 2026 1. Free Zone vs Mainland Sponsorship Visa procedures differ slightly between mainland entities and free zone authorities. Free zones operate under independent regulatory frameworks, although federal immigration approval remains central. The choice between mainland and free zone employment has broader implications, including: Corporate structuring Tax residency status Social security considerations Family sponsorship options These should be assessed before finalising relocation plans. 2. Employment Visa vs Other UAE Visa Categories The UAE also offers: Green Visas (for skilled professionals and freelancers) Golden Visas (long-term residence for investors and high earners) Investor/Partner Visas For entrepreneurs and senior executives, an employment visa is not always the optimal route. Strategic structuring may offer longer validity and greater flexibility. 3. Tax Residency Implications The UAE does not levy personal income tax. However, relocating professionals must consider: Exit tax implications in their home country UK Statutory Residence Test (for British nationals) Split-year treatment Ongoing ties and centre-of-vital-interests rules Corporate tax exposure for business owners Inadequate pre-departure planning can result in unintended dual tax exposure. 4. Corporate Tax and Employment Structuring With the introduction of UAE Corporate Tax, business owners relocating to the UAE must assess: Whether they will remain directors of overseas entities Permanent establishment risks Substance requirements Intercompany arrangements Employment structuring must align with the broader corporate and tax strategy. Why a Structured Relocation Approach Matters Many professionals treat the employment visa as a simple administrative formality. In practice, it forms part of a much larger relocation framework that includes: Tax residency planning Wealth structuring Asset protection Banking arrangements Property acquisition Family visa coordination A piecemeal approach often creates long-term complications. How Mosaic Chambers Group Supports Your Move to the UAE At Mosaic Chambers Group, we provide integrated advisory services for internationally mobile individuals and entrepreneurs. We coordinate: Pre-departure UK tax planning UAE tax structuring advice Cross-border compliance Local regulatory compliance We work alongside trusted UAE-based partners to manage: Visa processing Company formation Corporate structuring analysis Family sponsorship applications Wealth protection strategies Relocating to the UAE should be strategic, compliant and financially efficient - not reactive. Speak to Our Advisory Team If you are considering accepting a UAE job offer or relocating your business operations to the Emirates, we recommend obtaining professional tax and structuring advice before finalising your move. Early planning protects your position, reduces risk and ensures your move to the UAE is commercially sound and fully compliant. Get in touch with our team today to begin your relocation strategy with clarity and confidence.
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