Prepare for Making Tax Digital Changes by digitalising your processes with the help of an expert bookkeeper.
If you’re a small business owner, sole trader or landlord, you’ve probably heard plenty of rumblings about the imminent and non-negotiable changes surrounding Making Tax Digital.
While, on the face of it, it does seem scary when words like “compliance” and “tax” are being wielded by HMRC, it doesn’t have to be.
In this blog post, our experts break down Making Tax Digital and what you need to do in order to be prepared for compliance when the time comes.
What is Making Tax Digital?
Despite the name, Making Tax Digital (or MTD) is not about tax. It’s about bookkeeping.
The government-led initiative centres on moving UK taxpayers’ records from spreadsheets and paper to a fully digitalised system. Introduced in April 2019, it has already gone through a few phases and currently applies to VAT-registered businesses. This is all set to change, however.
As of April 2026, MTD will be applied to Income Tax records for self-employed individuals and landlords with an income of over £50,000, which will require three key changes:
- Digital Record-Keeping: All transactions (income and outcome) must be kept digitally in an HMRC-approved software.
- Quarterly updates: Single annual returns are a thing of the past. Now, you must send quarterly updates on income and expenditure using an MTD-compliant software.
- Final Declaration: Once you’ve submitted all four quarterly updates in one year, you need to finalise your annualised income with a final declaration.
For those affected, MTD isn’t a tax change, but the mandating of digitalised bookkeeping using compliant software.
How Cleverrbook can help with MTD
No matter your threshold or when you’re affected, if you’re worried about the incoming changes to MTD for Income Tax, a bookkeeper can help.
The best way to keep your MTD experience stress-free is to get ahead of the changes by working with an expert bookkeeper to help make the transition to bookkeeping software.
Choosing the right software for you can be a lot to consider, but with Cleverrbook Bookkeeping, it doesn’t have to be hard. As accredited experts and approved partners with many leading MTD-compliant software like Xero, QuickBooks, Sage, FreeAgent and more, Cleverrbook team can help you understand which software will be the best fit for you, get set up and transition to digital in time for the changes.
Or, to completely remove the stress from the equation, you can opt to outsource your bookkeeping to our experts completely, safe in the knowledge that we’ll ensure you stay compliant with MTD and other compliance requirements like AML, as well as keeping your books neat, correct and accounted for.