Making Tax Digital (MTD) for Income Tax is a major change for the self-employed, landlords and small businesses.
If your business or property income is above the thresholds set by HMRC you will need to keep digital records and send quarterly updates using compatible software. For many businesses the new rules take effect from 6 April 2026, so now is the time to get organised.
Find out when you will be affected by the MTD changes here.
Below you will find a clear checklist and a simple timetable you can follow to make sure you are ready and HMRC compliant.
The MTD essentials every business owner should know
If you are VAT registered you already need to keep digital records and submit VAT returns using compatible software.
From 6 April 2026, sole traders and landlords with qualifying income above the threshold will need to use MTD for Income Tax to keep digital records, send quarterly updates and submit their final return and payment via compatible software.
HMRC may write to you to confirm when you must start. It is still your responsibility to check eligibility and start on time even if you do not receive a letter.
You will need software that can create and store digital records and send those quarterly updates to HMRC.
Make sure your digital records are digitally linked where required. HMRC guidance on digital links and VAT Notice 700/22 explains how different pieces of software or spreadsheets must be connected.
Greenwood Tax & Accounting’s practical checklist
- Confirm whether MTD for Income Tax applies to you
Add together your self-employment (including property income) for the last tax year to check against the threshold. If you are unsure, we can help calculate this.
- Decide who will act for you
If you already use an accountant, let them know and authorise them to act via HMRC online services. If not, consider appointing someone to manage sign-up and filings.
- Choose compatible software and test it
Use HMRC’s software finder and pick a package that suits your business size and bookkeeping style. Trial it for at least one month.
- Move your records into digital form
Scan or export invoices, receipts and bank statements. If you currently use spreadsheets, ensure they can either connect to your chosen software or be imported without breaking any links.
- Set up digital links and automate feeds where possible
Bank feeds and integrated invoicing reduce manual entry and help maintain the chain of digital links HMRC requires.
- Reconcile and tidy historic records
Clean up the last 12 months of books so quarterly updates are accurate. Reconcile bank accounts, check VAT treatments and correct obvious errors.
- Run a mock quarterly update and tax calculation
Do a practice run so you become familiar with the process and timings.
- Register or sign up for MTD if required
Follow HMRC guidance for signing up or for agents to sign up on clients’ behalf.
- Plan cashflow for tax payments
Quarterly reporting does not change when tax is payable. Keep savings aside for the January and July payments on account where relevant.
- Keep a documented backup and continuity plan
Export regular backups and note how you will access records if software changes or you leave a provider.
Our Simple, practical timetable
This timetable assumes you need to be live by 6 April 2026.
Now to 31 January 2026
- Confirm whether MTD will apply to you
- If you already use accounting software, check with your provider that it will support MTD for Income Tax
February to March 2026
- Choose and subscribe to MTD compatible software. Try bank feed and invoice integrations.
- Migrate records and tidy the previous tax year.
- Reconcile accounts.
- Run test quarterly updates in the software so your first live submission is straightforward.
6 April 2026
- Start keeping digital records under the MTD regime if you are in-scope.
By 7 August 2026
- Send your first quarterly update covering the period from 6 April to 5 July 2026, if applicable.
- Check HMRC dates for quarters and filing windows.
Autumn 2026 and ongoing
- Continue submitting quarterly updates and review processes after each submission. Make improvements and automate more tasks over time.
Common mistakes to avoid when switching to Making Tax Digital
- Leaving the switch to the last week before the start date. Migration and testing take longer than most people expect.
- Keeping unlinked spreadsheets that break the digital chain. Ensure links are robust or use bridging software.
- Underestimating training time. Even simple systems need brief user training to avoid mistakes.
How Greenwood Tax and Accounting in Oswestry can help
We can:
- Confirm whether MTD applies to you and explain any exemptions
- Recommend and set up compatible software
- Migrate historic records and test your quarterly filing process
- Act as your agent to submit updates and the final return
At Greenwood Tax and Accounting, we will make the Making Tax Digital transition process straightforward and practical so you can focus on running your business. Get in touch with us today to find out how we can help.
