Making Tax Digital (MTD) for Income Tax is transforming the way businesses, landlords, and self-employed individuals manage and report their taxes. This makes the tax system more efficient, accurate, and transparent by replacing the manual record-keeping system with secure digital record-keeping and quarterly reporting.
From 6th April 2026, MTD for Income Tax Self-Assessment (MTD ITSA) becomes compulsory for those earning more than £50,000 in gross income (before expenses) from self-employment and/or property. The first quarterly submission will be due in July 2026.
At Adams Accountancy, we help our clients in every step of their digital income tax journey. From selecting MTD-compatible software such as Xero, QuickBooks, Hammock, or DEXT to ensuring seamless integration with your accounts, we help you stay legally compliant and confident. We make sure your income tax obligations are met with real-time reporting and accuracy.
In addition to MTD support, we also provide a wide range of business accounting services, VAT accounting services, and payroll services to ensure every aspect of your financial management is handled professionally.
Our assistance in making your digital submissions saves you time, reduces your stress, and improves your overall tax compliance. To talk to our experts call us on 01322 250 001 or email info@adams-accountancy.co.uk and get the conversation started. You can also explore the benefits of payroll services for small businesses on our blog to understand how integrated payroll support complements your digital tax setup.
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What is Making Tax Digital for Income Tax?
Making Tax Digital (MTD) for Income Tax is part of HMRC initiative to modernise the paper-based tax system to a fully digital tax management process. The aim is to make tax administration more efficient, accurate, and easier for individuals and businesses.
From April 2026, MTD for Income Tax Self-Assessment (ITSA) will become mandatory for sole traders and landlords who have an annual business or property income above the turnover threshold of £50,000.
Instead of submitting one annual tax return, affected taxpayers will be required to submit quarterly updates to HMRC using MTD-compatible software. Once the digital submission is done, the real-time income and expenses provide a more accurate picture of your tax position throughout the tax year.
At the end of the year, a final declaration will replace the traditional Self-Assessment. This ensures compliance with HMRC requirements.
Whether you’re self-employed or earning income from self-employment or property, preparing early for Making Tax Digital for Income Tax is key to ensuring a smooth transition.
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Our Making Tax Digital Services in Bexley
Our complete range of Making Tax Digital services in Bexley is designed to simplify the compliance process and streamline your digital tax reporting.
MTD-Compatible Software Setup
We’ll help our client choose, install, and integrate the right MTD-compatible software for their business. Accuracy, securely linking, and full compliance with HMRC’s digital submission requirements are our protocol.
Digital Record Keeping Support
Our experts help in maintaining electronic records of income and expenses. We also train you in using the approved software products effectively, and ensure your business meets HMRC’s digital record-keeping and compliance standards.
Quarterly Update Submissions to HMRC
With our professional support for quarterly reporting, you will never miss deadlines or make errors. We’ll prepare and submit your quarterly updates to HMRC, ensuring that your income and expenses are accurately recorded throughout the tax year.
Final Declaration Preparation
At the end of each tax year, we review your financial data, reconcile your digital records, and handle your final declaration to confirm your complete and accurate tax position with HMRC.
Whether you earn income from self-employment or property income, our guidance tailored to your business helps you understand and manage your digital tax efficiently with complete peace of mind.
Irrespective of the size of your business or source of income, our Making Tax Digital services in Bexley are designed to save time, reduce errors, and keep you compliant with HMRC’s digital tax obligations while you focus on growing your business.
Frequently asked questions
Q: Can my accountant do MTD for me?
A: Yes. Your accountant can manage the entire Making Tax Digital (MTD) process on your behalf. This includes setting up MTD-compatible software, maintaining digital records, and submitting quarterly updates and the final declaration to HMRC. At Adams Accountancy, we handle every stage to ensure full compliance and complete peace of mind.
Q: What does MTD mean in HMRC?
A: Making Tax Digital (MTD) is an HMRC initiative designed to modernise the UK tax system. It requires individuals and businesses to maintain digital records and submit their tax information online through approved software, improving accuracy and reducing paperwork.
Q: What are the problems with MTD?
A: The main challenges with MTD often include adapting to new software, understanding digital record-keeping requirements, and managing quarterly submissions. However, with professional guidance and the right software setup, these challenges can be overcome easily and efficiently.
Q: What software do I need for MTD Income Tax?
A: You’ll need MTD-compatible software that connects directly to HMRC’s systems, allowing you to record income and expenses digitally and send quarterly reports automatically. Adams Accountancy can help you choose and integrate the right software based on your business needs.
Q: What are the penalties for MTD non-compliance?
A: HMRC has introduced a points-based penalty system for Making Tax Digital non-compliance. Each missed submission earns penalty points, and once a threshold is reached, a £200 fine applies. Continued non-compliance can lead to additional fines and interest charges on unpaid tax. Adams Accountancy ensures proactive MTD management and timely filing support to avoid any penalty.
Q: How much does MTD implementation cost?
A: The cost of implementing MTD varies depending on your business size, software choice, and level of professional support required. At Adams Accountancy, we offer cost-effective packages tailored to your needs, ensuring smooth compliance without unnecessary expense.
HEAR FROM OUR CLIENTS
Here’s what our clients had to say about our accountancy services:
“We have been clients of Adams Accountancy for over two years now, for both our business and personal accounts – the transition from our previous accountant was carried out seamlessly. We are very impressed with the wealth of knowledge and experience of staff who are most efficient, helpful and professional – emails and calls are always returned promptly.
The owner of the business, Michelle Adams, is always personally available to answer any questions we may have and offer advice. We are extremely happy with the services provided and would have no hesitation in recommending the company to prospective clients.”
Sarah Holland Fiesta Kitchens Limited
“We have been working with Adams Accountancy for a number of years and couldn’t recommend them highly enough. Michelle and her team are always extremely professional, attentive, and proactive when it comes to all of our accounting needs including payroll, VAT processing and End of Year account filing. Any questions we raise, or advice we ask for is answered efficiently and in a way that even us non-accountants can fully understand!”
Keeley Percival South Eastern Attendance Advisory Service Ltd
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Let’s talk about accounts preparation and corporation tax. Adams Accountancy is here for your business. Call 01322 250 001 or email info@adams-accountancy.co.uk