Making Tax Digital (MTD) Services
Understanding Making Tax Digital (MTD)
For sole traders, landlords or business owners, Making Tax Digital will affect how you keep records and report your income to HMRC. With this new system, HMRC requires digital record keeping and quarterly updates rather than the traditional annual return. For businesses getting this wrong, it can result in penalties.
As your trusted accountant, we can help you get set up correctly from the start, so you’re not scrambling to catch up once deadlines arrive.
How Does Making Tax Digital Work?
Digital Record Keeping
Under MTD, HMRC requires businesses over specific income thresholds to use HMRC-compatible software to record all their income and expenses digitally.
Quarterly Updates
Rather than one annual return, MTD now requires four updates a year. These will be completed every quarter, with the inclusion of a final declaration at the end of the year.
Final Declaration
Alongside the new quarterly deadlines, you’ll still need to submit a final declaration confirming your figures by 31st January, in line with government guidance.
Who It Applies To
MTD already applies to VAT-registered businesses, and is now extending to sole traders and landlords based on income.
Regardless of turnover, all VAT-registered businesses must use compatible software to manage their records and submit quarterly returns to HMRC. Sole traders and landlords are being brought in on a phased basis according to income:
- Over £50,000 – April 2026
- Over £30,000 – April 2027
- Over £20,000 – April 2028
If you’re close to these thresholds, it’s worth checking your figures now rather than waiting until your deadline is on top of you.
How We Can Help
You don't have to work out Making Tax Digital on your own.
We’ll help you understand when MTD applies to you, and the actions you need to take to complete this process properly. This includes:
- Choosing the right HMRC-compatible software for your business
- Getting everything set up and registered correctly
- Making sure your digital records are accurate from day one, so your quarterly submissions are straightforward rather than stressful.
Even if the current thresholds don’t apply to your business, it’s never too early to get started and simplify your records for a digital future.
Making Tax Digital FAQs
How do I know if Making Tax Digital applies to me?
If you’re VAT-registered, MTD already applies to you. If you’re a sole trader or landlord, it depends on your income and will apply from April 2026, 2027 or 2028 depending on your threshold.
What software do I need for my MTD records?
You’ll need HMRC-approved MTD-compatible software, such as QuickBooks, Xero, FreeAgent or Sage. We’ll help you choose one that suits your business requirements and get it set up on your behalf.
What happens if I don't comply with MTD deadlines?
Late or non-compliant submissions can result in penalties, starting from missed deadlines and increasing the longer records go unfiled. We work with you to make sure this doesn’t happen.
Am I exempt from Making Tax Digital?
Some exemptions apply, including digital exclusion, religious objections, or income below the mandatory threshold. Get in touch and we can talk through whether you qualify.
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