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Making Tax Digital

Making Tax Digital is HMRC’s shift to a fully digital tax system, and from 6 April 2026 it will be mandatory for many sole traders and landlords. If your combined business and property income exceeds £50,000, you will be legally required to keep digital records and submit quarterly updates to HMRC using approved software.

We offer a one-off MTD setup service for £500 + VAT that covers everything you need to be compliant from day one – registration, software, training, and support through your first submission.

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Who Needs to Comply with Making Tax Digital

Making Tax Digital for Income Tax applies to individuals who are self-employed or receive rental income. The rollout is being introduced in two phases based on your annual turnover – not profit.

From 6 April 2026: sole traders and landlords with combined annual business and/or property income over £50,000.
From 6 April 2027: those with combined income over £30,000.

If you fall within these thresholds, you will need to keep digital records and submit four quarterly updates to HMRC each year, followed by an end-of-year finalisation. You will still pay tax annually, not quarterly.

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What Our MTD Setup Service Includes

Our one-off Making Tax Digital setup service is designed to get everything in place properly from the start. For £500 + VAT, we handle the full process so you can be confident you’re compliant when the deadline arrives.

MTD registration with HMRC and authorisation.
Accounting software setup and configuration using HMRC-approved tools.
Initial review of your existing records.
Up to two hours of hands-on training on how to use the software.
Clear guidance on MTD rules, deadlines, and what’s expected of you.
Support through your first MTD submission to HMRC.

For many simple cases, free MTD-compatible software is available, meaning there may be no ongoing subscription cost. This one-time fee is designed to leave you fully set up and confident to manage MTD going forward if you wish.

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Flexible Ongoing Support After Setup

Once your Making Tax Digital setup is complete, you choose how much involvement you want going forward. Some clients prefer to manage everything themselves, while others want quarterly reviews or a fully managed service.

We offer flexible options to suit different needs – from self-managed MTD with occasional support, to having us review and submit your quarterly updates, to a fully managed service including bookkeeping and tax returns. Additional training or ongoing support can be provided and will be agreed separately.

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Why You Should Prepare for Making Tax Digital Now

Making Tax Digital will be mandatory. Failure to comply may result in penalties, interest charges, and increased HMRC scrutiny. HMRC recommends preparing well in advance of the April 2026 deadline.

Early preparation gives you time to choose the right software and set up digital records correctly.
Rushing the process closer to the deadline increases the risk of errors and missed submissions.
Getting set up now means you can practise using the software before it counts.
Avoid penalties by being fully compliant before the first quarterly submission is due.

The sooner you act, the smoother the transition will be. One afternoon of setup now can save significant time and stress when the deadline arrives.

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“Sash has been extremely knowledgeable and reliable from when I first met him regarding helping me with my accounts as a director of a limited company for the first time. He has provided me with sound advice and helped me to understand the ins and outs of timely and successful accounting and made it easy."

Adam Garnett

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What Our Customers Say

We build growth-focused partnerships with every client, offering hands-on guidance through business transitions and tax complexities. Your dedicated accountant provides proactive advice when you need it most.

Clients value our availability and expertise, telling us they finally understand their numbers and feel confident expanding globally. That's the impact of innovative, responsive accountancy.

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Get In Touch With Us

Call us at +44 7795 226823 or email [email protected] anytime. We're available outside normal hours for real-time assistance. Use our contact form for quick follow-ups, and we'll reply promptly.

Start with a free, no-obligation consultation to explore your options. We'll discuss your business needs, share insights on automation or tax savings, and outline how we can partner for growth. It's easy and straightforward to take the first step.

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Still Not Sure?

Frequently Asked Questions

Common questions about international tax planning:

Do I need new software for Making Tax Digital?

Yes. MTD requires the use of HMRC-approved accounting software to keep digital records and submit quarterly updates. For many straightforward cases, free MTD-compatible software is available, so there may be no ongoing subscription cost. We help you choose and configure the right tool as part of the setup service.

Will I need to pay tax quarterly under MTD?

No. You will submit four quarterly updates to HMRC summarising your income and expenses, but you will still pay tax annually as you do now. The quarterly updates are reporting obligations, not payment deadlines.

What happens if I don’t comply with Making Tax Digital?

MTD will be mandatory for those who meet the income thresholds. Non-compliance may result in penalties, interest charges, and increased scrutiny from HMRC. Getting set up before the deadline is the simplest way to avoid these risks.

When does Making Tax Digital start?

MTD for Income Tax becomes mandatory on 6 April 2026 for sole traders and landlords with combined annual income over £50,000. From 6 April 2027, it extends to those with income over £30,000. Income refers to turnover, not profit.

Business Accounting and Tax Ltd provides automation-focused accounting, tax, and international services for small to medium businesses in Southampton and beyond. Contact us for a free consultation to grow your business.