Making Tax Digital – background information
Making Tax Digital (MTD) is HMRC’s initiative to move the UK tax system to a fully digital platform. Under the rules, businesses and landlords must keep digital records and submit tax updates to HMRC using approved accounting software.
MTD already applies to VAT-registered businesses, and from April 2026 it will apply to self-employed individuals and landlords with gross income over £50,000. From April 2027 the threshold will be reduced to £30,000 and further expansion is expected in future years.
Our practice provides Making Tax Digital support for small businesses, sole traders and landlords, helping clients move to digital accounting systems and stay fully compliant with HMRC.
Whether you need help choosing software, setting up digital bookkeeping, or submitting your quarterly updates, we can provide a simple and cost-effective solution.
Making Tax Digital for Income Tax (MTD ITSA)
From April 2026, many self-employed individuals and landlords will need to follow the new Making Tax Digital for Income Tax Self Assessment (MTD ITSA) rules.
Under MTD for Income Tax, you will need to:
- Keep digital records of income and expenses
- Use HMRC-compatible accounting software
- Submit quarterly updates to HMRC
- Complete an End of Period Statement
- Submit a Final Declaration replacing the traditional Self Assessment process
This means the current once-a-year tax return will be replaced by more frequent digital reporting.
Our team can manage the entire process for you, ensuring everything is submitted accurately and on time.
MTD Software Setup and Support
Choosing the right accounting software is a key part of complying with Making Tax Digital.
We help clients select and implement HMRC-recognised accounting software, including cloud systems designed for small businesses.
Our support includes:
- Software selection and setup
- Migrating from spreadsheets or manual records
- Linking software to HMRC for MTD submissions
- Ongoing bookkeeping and tax support
Why Prepare for Making Tax Digital Now?
Even if MTD does not apply to you now, preparing early offers several advantages:
- Avoid last-minute disruption when rules take effect
- Improve accuracy of financial records
- Get better real-time insight into business performance
- Reduce stress at tax deadlines
Moving to digital accounting now can help your business run more efficiently while ensuring you are fully prepared for HMRC’s requirements.