Making Tax Digital (MTD)
Understand what MTD means for you
and how to stay compliant with the upcoming changes.
What Is Making Tax Digital?
A Shift to Digital Tax Reporting
Making Tax Digital (MTD) is the government’s plan to modernise the way taxes are reported and paid in the UK. Instead of relying on paper records or old spreadsheets, MTD means you’ll keep your business or rental records in a digital format and send updates to HMRC online, using approved software.
This move is designed to make tax reporting more accurate, cut down on mistakes, and reduce the risk of missed deadlines or lost paperwork. For most businesses and landlords, it’s a big change in how you keep records and submit returns — but it’s also a chance to make life a bit simpler once you’re set up.
Who Needs to Comply and When?
MTD Timelines and Thresholds
VAT:
- All VAT-registered businesses must follow MTD rules for VAT returns.
Income Tax (MTD for ITSA):
- From April 2026, self-employed individuals and landlords with annual income over £50,000 must comply.
- From April 2027, the threshold lowers to £30,000.
- A further reduction to £20,000 is expected by April 2028.
Note: Income thresholds are based on gross income from self-employment and property, before expenses.
What are the Requirements?
Keeping Digital Records and Submitting Updates
Under Making Tax Digital, you’ll need to change how you keep your records and how you send information to HMRC. Instead of paper files or basic spreadsheets, you’ll use approved accounting software to keep a digital record of your business income and expenses. This software connects directly to HMRC, so you can submit your figures online.
For VAT-registered businesses, you must already keep digital records and submit VAT returns using MTD-compliant software. For Income Tax (coming from April 2026 for many), you’ll need to send quarterly updates of your income and expenses, plus a final annual declaration that replaces the old Self Assessment return.
The main requirements are:
Keep up-to-date digital records of all your business or rental income and costs
Use MTD-compatible software (like FreeAgent, Xero, QuickBooks or others)
Submit quarterly summaries to HMRC every three months
Submit a final end-of-year declaration with any adjustments
It can feel like a lot, but with the right setup it soon becomes part of your normal routine. We’ll help you get everything ready and make sure nothing’s missed.
How We Can Help
Support for Your MTD Compliance
We make MTD as simple as possible, so you can get on with running your business. Here’s what we can do for you:
Help you choose and set up the right MTD-compatible software
Make sure your records are kept tidy, accurate and up to date
Handle your quarterly updates and the annual declaration to HMRC
Remind you of upcoming deadlines, so nothing gets missed
Answer your questions and solve any problems, big or small
With us on your side, you can be confident you’re meeting all the MTD requirements without the stress.
Prepare for MTD with Confidence
Need assistance navigating Making Tax Digital?
Contact us today to ensure you’re ready for the changes ahead.
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Honest Feedback from Local Businesses
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