With the new tax year fast approaching, many businesses are beginning to prepare for the changes introduced by Making Tax Digital (MTD). From April, sole traders and landlords earning more than £50,000 will be required to submit quarterly updates to HMRC instead of relying solely on an annual tax return.
Around 900,000 individuals are expected to join the system in the first phase. If you are affected, this represents a significant change in how you manage your tax affairs — so getting organised early is key.
Using approved accounting software
Under MTD, businesses must use compatible accounting software to keep records and submit information digitally. Whether you already use digital bookkeeping or are moving away from paper records for the first time, it’s important to choose software that is approved by HMRC.
Good accounting software doesn’t just help you stay compliant. It can also:
- Save time by automating routine tasks
- Improve cash flow forecasting
- Support better financial decision-making
- Reduce the risk of errors
When selecting software, it’s worth considering how it can support your wider business needs — not just MTD compliance.
Registering for Making Tax Digital
HMRC will contact you if your tax return shows that you fall within the scope of MTD. However, registration is not automatic. You must sign up yourself, and it’s important to do this in good time to avoid disruption.
Are there any exemptions?
Some individuals are automatically exempt from MTD. This includes, for example, trustees and personal representatives dealing with the affairs of someone who has passed away. HMRC will usually notify you if you qualify for an automatic exemption.
In other cases, it may be possible to apply for an exemption, depending on your circumstances. If you are unsure, it’s worth checking whether this applies to you.
What if your income is below £50,000?
MTD is being introduced in stages. The current timetable is:
- From 6 April 2026 – income over £50,000
- From 6 April 2027 – income over £30,000
- From 6 April 2028 – income over £20,000
You can also choose to join voluntarily before your mandatory start date if you prefer.
Does MTD apply to partnerships?
At present, partnerships are not required to use MTD for Income Tax. However, HMRC has confirmed that this will change in the future, with further details to be announced.
How we can help
Choosing the right software and setting everything up correctly can feel overwhelming. We can help you select a suitable system, provide training, and manage your registration with HMRC.
If you’d like ongoing support with bookkeeping, quarterly submissions, or your year-end tax return, please get in touch. We’d be delighted to help you navigate Making Tax Digital with confidence.
e: office@londonaccountants.co t: 0203 137 9791
Kind Regards,
The Team at London Accountants
