Making Tax Digital Services

Expert accounting support for sole traders and landlords preparing for Making Tax Digital compliance.

Making Tax Digital Services | Atek Accounting

Making Tax Digital (MTD) represents the most significant change to tax reporting in decades. At Atek Accounting, we help businesses navigate this transition smoothly, ensuring you’re fully compliant and taking advantage of the efficiencies digital accounting brings.

Making Tax Digital introduces three fundamental changes to how you report income tax:

Digital Record Keeping

You must maintain your business records using HMRC-recognised software or approved spreadsheets with digital links.

Quarterly Updates

Submit digital updates for each income source four times per year, replacing the single annual tax return.

Final Declaration

Complete an annual Final Declaration by 31 January, confirming your total income for the tax year.

Who Is Affected by Making Tax Digital?

Starting in April 2026, self-employed individuals and landlords earning more than £50,000 in gross income from these sources will be required to follow the MTD for ITSA rules. Here’s the breakdown:

  • From April 2026:
    Individuals with qualifying income over £50,000 must comply.

  • From April 2027:
    Threshold lowers to £30,000.

  • From April 2028:
    Threshold further reduces to £20,000.

If your business is affected by Making Tax Digital for Income Tax, now is the time to start preparing. We can guide you through every step of the process to ensure you meet the requirements.

What Counts as “Qualifying Income”?

Qualifying income is your gross income before expenses. If you have multiple income sources (for example, both rental and self-employment income), HMRC will aggregate them to determine eligibility. This means if you have £25,000 in rental income and £30,000 in self-employment income, you exceed the £50,000 threshold and must join MTD from April 2026.

Choosing MTD-Compatible Software

To comply with MTD, you must use HMRC-recognised software. You have several options:

Full Accounting Software

Comprehensive solutions like Xero, QuickBooks, or Sage provide complete accounting functionality with MTD compliance built in. At Atek Accounting, we’re Certified Xero Partners and can help you set up and master cloud accounting software that streamlines your entire financial management process.

Bridging Software

If you prefer to maintain your records in spreadsheets like Excel, you can use bridging software to connect your spreadsheets to HMRC. This allows you to continue working in familiar tools while still meeting MTD requirements.

Free Software Options

HMRC offers free software with limited functionality for taxpayers with straightforward affairs. This is available if you meet all these conditions:

  • You’re unincorporated (sole trader or landlord)
  • Your turnover is below the VAT threshold (currently £90,000)
  • You have no employees
  • You use cash basis accounting

Getting Ready for Making Tax Digital

When Should You Register?

HMRC encourages early sign-up to familiarise yourself with the new processes before the mandatory start date. Many taxpayers can join the testing programme now to get comfortable with digital record keeping and quarterly submissions.

Even if your income is currently below the thresholds, it’s worth preparing now, especially if your income is growing or variable. The transition to digital record keeping takes time, and starting early gives you the best chance of a smooth implementation.

How Atek Accounting Can Help

Our aim is to make MTD straightforward and stress-free.

We can take the pressure of compliance by managing or supporting you to handle the technical requirements, deadlines and submissions, so you can focus on your business.

 

Here’s what we can handle for you:

  • Assessment of your MTD obligations and timeline
  • Clear guidance tailored to your situation
  • Software selection and set-up support
  • Training on digital record keeping and MTD-compatible software
  • Quarterly update preparation and submission
  • Final Declaration completion and tax planning
  • Penalty avoidance strategies and compliance monitoring
  • Ongoing support as regulations evolve

Making Tax Digital FAQs

From 6 April 2026, MTD for Income Tax Self Assessment applies to:

  • Sole traders with gross income over £50,000
  • Landlords with property income over £50,000
  • Individuals with combined property and self-employment income over £50,000

The threshold reduces to £30,000 in April 2027 and £20,000 from April 2028 (subject to legislation).

MTD introduces three main changes:

  • Digital record keeping using compliant software or approved spreadsheets
  • Quarterly digital updates for each income source (self-employment and property)
  • Final Declaration after year-end, replacing the traditional SA100 tax return

While reporting becomes more frequent, the timing of tax payments remains unchanged, you’ll still make payments on account and a balancing payment by 31 January after the tax year.

Yes. Landlords must send separate quarterly updates for property income and self-employment income if they have both. This means if you’re both a landlord and run a business, you’ll be submitting eight quarterly updates per year in total.

Yes. Although you’ll submit quarterly updates throughout the year, you must still complete an annual submission, now called a Final Declaration, by 31 January each year. This confirms your total income for the previous tax year and allows you to make final adjustments or claim additional reliefs.

You must use HMRC-recognised MTD-compatible software. Options include:

  • Full accounting software like Xero, QuickBooks, or Sage (we’re Certified Xero Partners and can help you get set up)
  • Bridging software that connects spreadsheets like Excel to HMRC
  • Free software with limited functionality for eligible taxpayers with straightforward affairs

View the official HMRC list of compatible software at GOV.UK.

For those entering MTD in April 2026, the key deadlines are:

  • 7 August 2026 – First quarterly update (6 April – 5 July)
  • 7 November 2026 – Second update (6 July – 5 October)
  • 7 February 2027 – Third update (6 October – 5 January)
  • 7 May 2027 – Fourth update (6 January – 5 April)
  • 31 January 2028 – Final Declaration for 2026/27 tax year

Yes. HMRC will introduce a new points-based penalty system:

  • One point per missed deadline
  • A £200 penalty applies once you reach the threshold of points
  • Important: No penalty points for late quarterly updates during the first 12 months (from April 2026 entry)
  • Points reset to zero if you meet all deadlines for 12 consecutive months

Late payment penalties also apply: 3% if tax remains unpaid 15 days after the deadline, a further 3% after 30 days, then daily penalties at 10% per year until settled.

Yes, but only if it’s not reasonable for you to use digital tools due to:

  • Age
  • Disability or health condition
  • Religious objection to using digital tools
  • No internet access where you live or work

Specific exemptions also apply to foster carers and those without a National Insurance Number. Apply for an exemption at GOV.UK.

HMRC encourages early sign-up to familiarise yourself with the processes before mandatory compliance begins. Many taxpayers can join the testing programme now. Even if your income is currently below the thresholds, it’s worth preparing early, especially if your income is growing or variable.

The transition to digital record keeping takes time. Starting early gives you the best chance of a smooth implementation and helps you avoid last-minute stress.

Why Choose Atek Accounting for MTD Support?

Making Tax Digital doesn’t have to be complicated. At Atek Accounting, we’ve been helping businesses transition to digital accounting for years. As Certified Xero Partners, we have deep expertise in cloud accounting software and MTD compliance.

Tailored Support

We adapt our services to your business needs, whether you need full outsourced accounting or just quarterly MTD submissions.

Cloud Expertise

As Certified Xero Partners, we help you leverage cloud accounting to streamline your finances and meet MTD requirements effortlessly.

Personal Service

You’ll work with experienced accountants who understand your business and are available when you need them.

Interested in learning more?

Book a free 30-minute discovery chat; let’s discuss your business, your challenges, and explore whether we’re the right fit to support you.

Weybridge – 01932 647064

London – 020 3405 4013

info@atek-accounting.co.uk