What is Making Tax Digital (MTD)?
Making Tax Digital (MTD) is a UK government initiative by HM Revenue & Customs (HMRC) to modernise the tax system. It requires businesses and individuals to keep digital records and submit tax information electronically using compatible software.
The goal is to make tax administration more accurate, efficient, and easier to manage — reducing errors caused by manual data entry and paper records.
Official HMRC source
Who Needs to Comply and When?
MTD for VAT
All VAT-registered businesses must already keep digital records and file VAT returns through MTD-compatible software.
MTD for VAT guidance
MTD for Income Tax (MTD ITSA)
If you are self-employed or a landlord, you’ll soon need to follow MTD rules for income tax.
| Start Date | Who It Applies To |
|---|---|
| 6 April 2026 | Self-employed individuals and landlords with annual business or property income over £50,000 |
| 6 April 2027 | Income threshold reduces to £30,000 |
| Future Phase | HMRC intends to expand to those earning above £20,000 (date TBC) |
If you earn below the threshold, you can still voluntarily join early to familiarise yourself with digital record-keeping.
What MTD Requires
Digital Record Keeping
You must record income and expenses digitally — no more manual logs or handwritten ledgers.
Create digital records guide
Quarterly Submissions
You’ll need to submit tax updates to HMRC every three months using MTD-compatible software.
End-of-Year Finalisation
At the end of each tax year, you’ll send a final statement (similar to a Self Assessment return) confirming your total income and adjustments.
Compatible Software
You must use software approved by HMRC that can directly link to their system for submissions.
Find MTD-compatible software
Benefits of Making Tax Digital
- Fewer errors — Automated data reduces calculation mistakes.
- Real-time visibility — Quarterly updates give you a clearer view of how much tax you owe throughout the year.
- Better record keeping — Digital systems eliminate paperwork chaos.
- Improved cash flow planning — You can see your tax position at any time, helping you plan ahead.
- Reduced stress — With software doing the heavy lifting, you can focus on running your business or managing your property.
Common Mistakes to Avoid
- Missing the sign-up window — prepare early, especially if your income is near the £50k threshold.
- Using non-compatible software — always check HMRC’s approved list.
- Combining manual and digital records — all your data must be linked digitally.
- Leaving record-keeping until year-end — defeats the purpose of quarterly visibility.
- Ignoring agent authorisation — if you hire a professional, they must be authorised to act on your behalf.
MTD technical publications and updates
How a Tax Expert Can Help You Navigate MTD
Transitioning to MTD can be confusing — especially if you’re managing multiple income sources, properties, or VAT-registered activities.
That’s where an experienced accountant, bookkeeper, or tax professional becomes invaluable.
Here’s what a qualified expert typically does for taxpayers preparing for MTD:
- Assess your situation and eligibility
They review your income streams and determine when MTD applies to you, ensuring nothing is overlooked. - Set up MTD-compatible software
Experts help you choose, install, and configure software (like QuickBooks, Xero, or FreeAgent) so your records and submissions are compliant. - Maintain accurate digital records
They’ll make sure your expenses, income, and receipts are properly logged throughout the year, minimising HMRC queries. - Handle quarterly and annual submissions
Instead of juggling deadlines, your expert submits quarterly updates and final declarations to HMRC on your behalf. - Advise on efficiency and planning
With quarterly reporting, experts can help you anticipate tax bills and make smarter cash-flow decisions. - Stay up to date with HMRC guidance
They monitor regulation changes and keep your setup compliant as MTD evolves.
Find Verified Tax Experts on CheckTheBooks
CheckTheBooks makes it easy to find verified UK accountants and finance professionals who are already familiar with MTD requirements.
Here’s how it works:
- Post your request — describe your situation (e.g. “Need help setting up MTD for my property income”).
- Get offers from verified experts — multiple professionals will respond with clear quotes and turnaround times.
- Compare and choose — review profiles, reviews, and pricing to hire the best fit.
- Pay securely via Escrow — your payment is protected until the work is completed to your satisfaction.
Whether you’re a sole trader, landlord, or small business owner, you can find the right professional to handle MTD compliance smoothly and affordably — all in one place.
Ready to Go Digital?
Making Tax Digital isn’t just another government requirement — it’s an opportunity to simplify your finances, improve accuracy, and take control of your tax planning.
Instead of doing it alone, connect with a verified tax expert on CheckTheBooks and get your business MTD-ready with confidence.