Explaining Making Tax Digital
Making Tax Digital (MTD) is a key HMRC initiative designed to modernise how individuals and businesses manage their tax. In short, it’s the government’s plan to make tax administration more effective, efficient, and easier for taxpayers.
For anyone wondering how making tax digital works, It’s essentially a move away from paper records and annual tax returns. Instead, businesses and landlords must keep digital records and submit quarterly updates to HMRC using approved software.
This digital approach ensures greater accuracy, fewer missed deadlines, and real-time insight into your tax position, saving you time and reducing the chance of costly mistakes.
When Is HMRC Making Tax Digital?
The rollout of Making Tax Digital is happening in stages. For VAT-registered businesses, it’s already in place. For Income Tax, it’s being introduced gradually:
- From April 2026, those earning over £50,000 from self-employment or property must comply.
- From April 2027, the threshold drops to £30,000.
- From April 2028, those earning £20,000+ will be required to join.
When is HMRC Making Tax Digital? The HMRC MTD latest news letter states that there are the key dates to note where they will be hosting webinars to help landlords, agents, and small businesses prepare for the change.
How Will Making Tax Digital Affect Me?
Many self-employed individuals and landlords are asking, how will Making Tax Digital affect me? The short answer: it changes how you record and report your income.
You’ll need to:
- Keep your business records digitally using compatible software.
- Submit quarterly updates to HMRC.
- Complete an annual end-of-period statement to finalise your tax position.
This may sound complex, but with the best Making Tax Digital software for self employed, compliance becomes much easier. KPN Accountants can help you choose a system that integrates seamlessly with your existing bookkeeping process- ensuring accuracy and peace of mind.
How to Register for Making Tax Digital
If you were wondering… Do I have to sign up to MTD? – here’s what you need to know.
You must register with HMRC once you meet the qualifying income threshold. Here’s how to get started:
- Check your income from self-employment or property to confirm when you need to join.
- Choose MTD-compatible software, if you’re looking for the easiest software for Making Tax Digital, we can help guide you.
- Sign up via your HMRC online account or through your accountant.
- Begin submitting quarterly updates once you’re registered.
KPN can manage the process for you. We also help resolve HMRC MTD issues that can occur during registration or submissions.
Choosing the Right Software for Making Tax Digital
With dozens of approved software options available, picking the right one can feel overwhelming. The best Making Tax Digital software for self employed users should be simple to use, HMRC-approved, and suitable for your record-keeping style.
Popular providers include QuickBooks, Xero, and Sage. Still unsure? KPN Accountants can recommend the right platform, set it up for you, and provide training so you can manage your records with confidence.
Accountants in Making Tax Digital: Why You Need Expert Support
Working with professional accountants in Making Tax Digital ensures you stay compliant, avoid penalties, and benefit from tailored advice. For many clients, the transition to MTD offers a valuable opportunity to modernise their financial systems and streamline reporting.
KPN Accountants are experts in Making Tax Digital West Sussex businesses rely on. We can guide you through registration, help you select the right software, and ensure your returns are accurate and submitted on time. Our proactive approach means you’ll always be one step ahead of HMRC’s requirements.
Strategies for Successful End-of-Year and Ongoing Digital Tax Planning
Although MTD focuses on quarterly updates, it also changes how businesses approach end of year tax and financial planning. Real-time data allows better cash flow forecasting and smarter decision-making.
Staying Ahead: HMRC Making Tax Digital Latest News
As MTD continues to roll out, HMRC frequently updates its guidance. From new penalty systems to changes in how data is reported, it’s important to stay informed. If you encounter challenges or need clarification on deadlines, rely on professional advisors who understand the HMRC Making Tax Digital issues that can affect your submissions.
Guide to End-of-Year and Digital Compliance
This blog serves as your quick guide to end-of-year tax planning and MTD compliance. However, every business has unique needs, whether you’re a sole trader, landlord, or small company.
The UK end of year tax planning and digital reporting landscape is evolving fast, but with expert help, you can stay compliant and reduce stress.
Get Expert Help with MTD
Transitioning to Making Tax Digital doesn’t need to be complicated. At KPN Accountants, we simplify the process, from registration to software setup and ongoing support. Whether you’re self-employed, a landlord, or a small business owner, our team ensures your digital records are accurate and fully compliant with HMRC rules.
Contact KPN Accountants today to discuss how we can help you make the switch to MTD and keep your finances future-ready.