Making Tax Digital is the most significant change to the administration of UK tax in a generation. HMRC’s programme to replace manual and paper-based record keeping with fully digital systems is already well advanced — and for many businesses and individuals, the next wave of requirements will demand action in the near term.

MTD for VAT has been mandatory for all VAT-registered businesses since April 2022, requiring digital record keeping and submission through compatible software. Attention has now turned to MTD for Income Tax Self Assessment, which will require sole traders and landlords with qualifying income above £50,000 to operate under the new regime from April 2026, with the threshold extending to £30,000 from April 2027. Further changes affecting partnerships and a broader population of taxpayers are expected to follow.

The practical reality

HMRC’s public position is that Making Tax Digital will reduce errors, improve efficiency, and give businesses a clearer real-time picture of their tax position. In practice, the transition requires genuine preparation: a review of existing record-keeping systems, the selection and implementation of compatible software, and in many cases a reconsideration of how financial information flows through the business day to day.

For businesses that have historically maintained records manually, or through software that does not meet HMRC’s digital linking requirements, the administrative changes involved are not trivial. The cost and disruption of a poorly managed transition can be considerable — and the penalties for non-compliance, once a deadline has passed, are an unwelcome addition.

How we help

We work with clients to assess their current position against the relevant MTD requirements, identify the changes needed, and manage the transition in a way that minimises disruption. That includes advising on the selection of appropriate software, reviewing existing processes, and ensuring that the new arrangements are as efficient as possible before they become mandatory rather than after.

The businesses that find MTD most straightforward are those that have prepared properly in advance. For our existing clients, that preparation is built into the advice we provide as a matter of course. For businesses not yet working with us, there is invariably more that can be done — and the earlier that conversation takes place, the more options are available.

Contact us

If you are uncertain whether your current systems meet MTD requirements, or wish to understand what the forthcoming changes mean for your business, please contact us. We are happy to carry out an initial review without obligation.