Making Tax Digital: A Plain-English Local Guide

Making Tax Digital for Income Tax is starting to affect more sole traders and landlords.

The first group are those with qualifying income over £50,000, who are required to use Making Tax Digital from 6 April 2026. Their first quarterly update deadline is 7 August 2026.

If your income is below that level, it may still be worth getting ahead of the game. The rules are due to widen in future years, and better records can make life easier long before Making Tax Digital becomes compulsory for you.

On this page:

1. Why this page exists

This page is here to help local sole traders, small business owners and landlords understand what is changing, what they may need to check, and how to start getting their records into better shape — so you know where you stand, what needs attention, and what to do next.

It is not here to replace your accountant.

This page is general information only. It is not tax advice, and it does not replace guidance from HMRC, an accountant, or a tax adviser. If you need advice about your own tax position, VAT, or Making Tax Digital obligations, please speak to an appropriately qualified professional.

If you already have an accountant, good records can help them help you. It may reduce back-and-forth, make year-end work easier, and give you better visibility of your business during the year.

If you do not currently have an accountant or bookkeeper, you may still have options. Some people will be able to do more themselves, especially where their records are straightforward, but they may benefit from a simple system, occasional guidance, and regular check-ins.

2. What is Making Tax Digital?

Making Tax Digital, often shortened to MTD, is HMRC’s move toward digital record keeping and more regular reporting.

For Income Tax, it means affected sole traders and landlords will need to keep digital records using compatible software and send quarterly updates to HMRC.

These quarterly updates are not the same as a full tax return, but they do mean your records need to be kept more regularly and more consistently during the year.

3. Key Dates

For those in the first group, Making Tax Digital for Income Tax starts from 6 April 2026.

The first quarterly update deadline is 7 August 2026.

Later quarterly update deadlines are expected to follow during the year.

The rules are due to extend to lower income thresholds in later years, so even if you are not affected immediately, it is sensible to understand what is coming.

4. What should you check now?

A useful starting point is to ask:

  • Do I know whether MTD applies to me?
  • Do I know what my qualifying income is?
  • Are my business and personal records clearly separated?
  • Can I find my invoices, receipts and bank statements?
  • Do I use a spreadsheet, bookkeeping software, paper records, or a mix?
  • Would my accountant or bookkeeper receive clean, organised records from me?
  • Could I keep my records updated every month, not just once a year?
  • Do I understand what software or system I may need?

5. Already have an accountant?

That is a good thing.

This page is not suggesting you replace them. In fact, Making Tax Digital may make your relationship with your accountant even more important.

But accountants can only work with the records they receive. If your records are scattered across paper, emails, bank statements, apps, photos and spreadsheets, the first job is often getting those records into better order.

Better records can help your accountant help you.

6. Doing it yourself?

Some sole traders, landlords and small businesses may choose to handle more of their own bookkeeping, especially if the business is simple.

DIY does not have to mean doing everything alone.

A practical approach might include:

  • a simple records system
  • a regular monthly bookkeeping habit
  • clear folders for receipts, invoices and statements
  • basic checks before each quarterly update
  • occasional support when you are unsure
  • a review before key deadlines

The aim is not perfection. The aim is to build a system you can actually keep using.

7. Before software, sort the records

Software can help, but software is not magic.

Before choosing an app or system, it helps to know what records you have, what is missing, how your income and expenses are currently tracked, and whether your paperwork is organised enough to support regular updates.

A good first step is often a simple records review.

8. A simple first step

Set aside one hour and gather:

  • your latest business bank statements
  • sales invoices or income records
  • receipts and purchase invoices
  • mileage or vehicle records, if relevant
  • loan, finance or asset purchase paperwork
  • any spreadsheet or notebook you currently use
  • letters or notices from HMRC

Then ask:

  • Can I find what I need?
  • Can I tell what month each item belongs to?
  • Can I separate business and personal spending?
  • Can I explain the numbers to myself?
  • Could someone else understand these records if they had to help me?

If the answer is “not really”, you are not alone. That is exactly where many small businesses start.

9. Registering for Making Tax Digital

Registering for Making Tax Digital for Income Tax means setting up (or using) a Government Gateway account, signing up for MTD for Income Tax with HMRC, and connecting compatible software so quarterly updates can be submitted.

I am happy to walk you through what registering involves and explain each step in plain English. I cannot register or act on your behalf yet: HMRC AML registration has been submitted and paid for and is currently awaiting approval, and MRS Bookkeeping is not yet HMRC AML-supervised. I can only apply for HMRC Agent Services Accreditation, which is needed to act as your agent with HMRC, once that approval is confirmed.

Once accreditation is in place, hands-on support with registration and ongoing submissions will become part of the service. Until then, this page (and a conversation with me) can help you understand what is involved and get ready.

10. No panic, but do not ignore it

Making Tax Digital does not need to become a last-minute panic.

The earlier you understand what is changing and how ready your records are, the easier it is to make sensible decisions.

  • You may need software.
  • You may need your accountant’s help.
  • You may be able to do more yourself.
  • You may simply need to get your records organised first.

The important thing is to start with clarity.

11. Useful next steps

Check whether Making Tax Digital applies to you.

Review the current state of your records.

Speak to your accountant if you already have one.

Decide whether DIY bookkeeping with some support is realistic for you.

Start building a simple monthly routine.

Do not wait until the first deadline is close.

For more general guides and links organised by topic, see the Resources page.

12. Local Help

MRS Bookkeeping is based locally and provides practical support with records, bookkeeping confidence and business clarity.

This may include helping you get records organised, prepare better information for your accountant, or build a simple DIY bookkeeping routine with occasional support.

There is no hard sell here. The first step is simply to understand what is coming and where you currently stand.

13. Not sure where your records stand?

Before choosing software or changing your system, it may help to understand what records you already have, what appears to be missing and what needs to happen next.

MRS Bookkeeping can currently provide general MTD education, records-readiness support and practical organisation.

MRS Bookkeeping now also provides MTD submissions, tax return preparation, transaction categorisation and bookkeeping for client use. Formal tax advice and payroll services will be added once AML supervision is confirmed.

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14. Current service scope

HMRC AML registration has been submitted and paid for and is currently awaiting confirmation. MRS Bookkeeping is not a money service business, or a trust or company service provider, so HMRC’s own guidance confirms it can trade while that application is being processed.

Alongside records organisation, bookkeeping-readiness, practical admin support, education and clarity work, MRS Bookkeeping now also offers bookkeeping for client use, accounts preparation, VAT return preparation, MTD submissions and tax return preparation. Payroll services and formal tax advice will be added once AML supervision is confirmed.

For more detail, please see the AML / Service Scope page.

15. Last updated

July 2026