Managing HMRC’s Making Tax Digital (MTD) Obligations

Managing HMRC’s Making Tax Digital (MTD) obligations

For the last few years HMRC’s MTD obligations have been limited to the filing of business VAT returns.

If this applies to your business we can help you to manage your MTD for VAT obligations to avoid the penalties of non-compliance.

HMRC are extending MTD filing regulations to include uploads of quarterly accounts data directly from account’s software to HMRC’s digital accounts over the next few years.

The introduction of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) will fundamentally change the way businesses, the self-employed, and landlords interact with HMRC, starting from 6 April 2026.

The rules will initially apply to businesses, self-employed individuals, and landlords with an income of over £50,000 annually. The system will then be extended to those with an income between £30,000 and £50,000 with effect from 6 April 2027. It was also announced in the 2024 Autumn budget that MTD for ITSA would be extended to include sole traders and landlords with income over £20,000 by the end of the current parliament.

A new system of penalties for late filing and late payment of tax for ITSA will also apply.

What Will You Need to Do?

Under MTD ITSA, you’ll need to:

• Keep digital records of your income and expenses
• Submit quarterly updates to HMRC
• Complete an end-of-year final declaration

How We Help

As a small, approachable practice, we offer hands-on support and practical advice.

We will look at how you currently keep records and explain what needs to change (if anything).

We will recommend simple, user-friendly accounting software and help you get started.

If you require assistance, we can help prepare and submit your quarterly updates accurately and on time.

We will finalise your End of Period Statement and tax declaration, making sure nothing is missed.

If you have questions during the year, you can speak to someone who knows you and your business.

The earlier you prepare, the easier it will be.

If you’d like to talk through how MTD ITSA will affect you, get in touch and we’ll guide you through it.

We’ll be there to support you as the changes are introduced.