Making Tax Digital (MTD)

Making Tax Digital (MTD) is a key part of the UK government's plans to modernise the tax system. Under MTD, businesses and landlords are required to keep digital records and submit their tax returns to HMRC using MTD-compatible software. The goal is to make tax administration more accurate, efficient, and easier to manage.

The transition to digital tax reporting is happening in phases. MTD for VAT is already mandatory for all VAT-registered businesses. The next major phase is MTD for Income Tax Self Assessment (ITSA), which will apply to sole traders and landlords with qualifying gross business and property income over £50,000 from April 2026, and those with income over £30,000 from April 2027.

Adapting to MTD does not have to be stressful. We will help you understand if and when you need to comply, select the most suitable compatible software for your business (such as Xero, QuickBooks, or FreeAgent), and guide you through the process of setting up digital records and linking your systems to HMRC. Preparing early ensures a seamless transition, avoids last-minute stress, and protects you against potential penalties for non-compliance.