Making Tax Digital
Making Tax Digital (MTD) is the first in a series of moves by the government to turn the tax system in the UK fully digital. Changes in legislation mean that the way you record and present your tax records has changed and has moved on to an electronic footing.
The first stage in this process was the introduction of Making Tax Digital for VAT. This means that VAT-registered businesses with a taxable turnover above the VAT threshold are required to keep records digitally and use software to submit their VAT Returns.
The second stage was the introduction of Making Tax Digital for Income Tax. This is a rolling programme of engagement with sole traders, depending on their turnover. Since April 2026 it is being applied to sole traders and landlords with a combined taxable turnover above £50,000. This means that if your combined income from self-employment and property is greater than £50,000, you are required to keep records digitally and use software to submit your tax returns.
Our team are up-to-date with all HMRC requirements and procedures. We offer our clients advice and support to enable them to make the move to electronic submissions as painless as possible.
If you are not fully aware of how this will affect you and your business, you must make sure that you get up to speed as soon as possible. To help you, HMRC have prepared a comprehensive online guide covering all the main aspects for taxpayers. We strongly recommend that you take a look at it as soon as you can. To find out more about Making Tax Digital, click on the links below.
https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital
Making Tax Digital – HMRC Help Pages
Understanding the Process
Making Tax Digital is a government initiative aimed at bringing the tax system into the 21st century. It aims to provide HMRC with up-to-the-minute information as it requires taxpayers to have a fully digital system through which they will register for, file and pay their taxes. Our team can help you successfully negotiate your way through this process.
Recording Self-Assessment Digitally
VAT went fully digital in April 2021. The Government now require businesses to keep all VAT data online, using electronic accounting software, rather than through receipts and hard copies.
Self-Assessment goes fully digital from April this year and will be introduced in 3 stages. For the tax year 2026/27, sole-traders and landlords with a combined taxable turnover above £50,000 are required to keep records digitally and use approved accounting software to submit their tax returns. For tax year 2027/28 the threshold will drop to £30,000 and from 2028/29 will include those with a combined turnover over £20,000.
Our team are up-to-date with all HMRC requirements and we are offering our clients advice and support to allow them to make the transition to electronic submissions as painless and cost-efficient as possible.
Submitting Self-Assessment Digitally
Since April 2021, businesses have been required to upload and submit their VAT returns through compatible software. These arrangements have now been rolled out to some Self-Assessment tax payers, starting from 6 April 2026. This requires sole traders and landlords who are above the turnover threshold to purchase compatible software to record and submit their returns.
These returns must now be made quarterly for each type of return (trade earnings and property earning), with a summary, combined return submitted at the end of the tax year.
We can provide advice and support to ensure you choose the most appropriate and cost-effective system for your business.
Complying with the Law
Our specialist team can ensure your business remains fully compliant with the MTD legislation.