With ‘Making Tax Digital’ on the horizon, we wanted to take a moment to share some important updates. 

As we gear up for ‘Making Tax Digital’, we’re delighted to introduce Kathryn who is our MTD expert and your dedicated ‘go-to’ person for everything related to the new rules. Many of you will already have heard from Kathryn as she’s been working behind the scenes (and very much at the front!) helping clients prepare well ahead of the deadlines.  

A Chartered Accountant and Aberystwyth University graduate, Kathryn brings experience across multiple industries and has vast experience within the aerospace industry.

If you’re unsure what MTD means for you, Kathryn is here to help guide you through it calmly and confidently. 

Kathryn’s main tip – start using compatible software now, before it becomes mandatory, this is the foundation of compliance, and we can guide you through bank feeds and workflows to avoid panic in April 2026.

If you have questions, concerns, or simply want clarity on what MTD means for your business, Kathryn is your first port of call. We strongly encourage you to get in touch and book a conversation sooner rather than later. 

You can contact Kathryn here.

🧾 What Is Making Tax Digital? 

You might have heard the buzz about Making Tax Digital (MTD) if you’re self-employed, a landlord, or run a small business. Simply put, MTD is HMRC’s big push to move the UK tax system from paper and manual record-keeping into the digital age.  

Here’s the idea in plain English: 

• Instead of scribbling receipts into notebooks or relying on annual forms once a year, MTD asks you to keep digital records and regularly sends updates to HMRC using software that works with their system.
  
• It’s already been mandatory for VAT-registered businesses since 2022 – you may know this already if you use accounting software or submit VAT returns online.  
  
• Now, the digital revolution is expanding into income tax for individuals and businesses too.  

In other words, MTD is about modernising how tax works, making it clearer, quicker and (hopefully) with fewer mistakes.

📅 When Is It Happening? 

The rollout of MTD for Income Tax is phased in over three tax years, based on how much you earn from self-employment and/or property: 

Starting Date –  Who Must Use MTD 

6 April 2026  – Sole traders & landlords with income over £50,000 per year.

6 April 2027  – Income over £30,000 per year.

6 April 2028  – Income over £20,000 per year.

This means that if you earn less than these thresholds you won’t have to join straight away, but it’s still a good idea to start thinking ahead and get comfortable with digital record-keeping.

💡 What Does MTD Actually Change? 

Here’s what’s new (and what’s not): 

✔ What Does Change 

• Digital records required – No more shoe-box receipts and year-end panic. You must keep your business income and expenses in digital form using HMRC-approved software.
  
• Quarterly updates – Instead of one annual Self Assessment return, you’ll send four summaries throughout the year showing your income and costs.  
  
• Final declaration – At the end of the year, you confirm the year’s figures with a final declaration (like a digital “wrap-up”).  

❌ What Doesn’t Change 

• You’ll still pay your tax on the same deadlines (usually by 31 January and 31 July each tax year).  
  
• MTD doesn’t change how much tax you owe – it just changes the way you report it.  

If you’ve been dreading that once-a-year scramble to find invoices and receipts, MTD aims to make tax admin smoother and more continuous. 

🖥️ Software and Digital Records 

To comply with MTD you’ll need: 

• MTD-compatible software (we recommend using Xero).
  
• To keep digital records throughout the year, including all business income and expenses – with dates, amounts and categories properly logged.

The good news is that most popular accounting tools such as Xero already plug into the system. This makes quarterly reporting much more straightforward than doing it manually. 

📌 What This Means For You 

Whether you’re a sole trader, a landlord or run a small business that’s already VAT-registered or about to be, MTD will affect how you manage your tax records: 

• More frequent reporting – Quarterly updates replace the traditional annual tax return for many.  
  
• Digital record-keeping is essential, not optional.  
  
• You’ll need to get comfortable with software if you haven’t already – it’s central to complying with MTD.  

For many, this means a bit more admin during the year – but in return, you get a clearer picture of your tax position as you go, and hopefully less stress at year-end. 

🛠️ What Action You Need To Take 

Here’s a simple checklist to get you ready: 

👉 1. Check if you need to join MTD. 
Look at your income from self-employment and/or property. If it’s over the thresholds in the table above, mark your calendar for compulsory compliance dates.  

👉 2. Choose MTD-approved software. 
If you aren’t using accounting software yet, now’s the time. Pick one that works with HMRC’s system such as Xero. 

👉 3. Start digital record-keeping now. 
Even if you won’t be mandated to join until a later date, getting in the habit of digital records is smart planning.  

👉 4. Sign up for MTD at the right time. 
When you reach the income threshold, sign up through HMRC or via your software, don’t leave it until the last minute.  

👉 5. If in doubt, ask for help. 
Accountants and tax advisors are already helping clients adjust to MTD. Getting professional help early can save stress later.

📌 Final Thoughts 

It’s a big shift, probably the biggest change in how tax is reported for decades, and it will take a little learning. But once you’re set up, the ongoing process becomes more predictable and can save you that yearly scramble through shoeboxes of paperwork.

And remember: this is about making tax easier and more transparent, not trickier. With the right tools and a little forward planning, most people adapt quickly. 

If you have questions about Making Tax Digital, Kathryn is your go-to expert and ready to help. Don’t wait, get in touch with her today and make sure you’re fully prepared. You can contact Kathryn directly here. 

From all of us at Perrigo, thank you for reading, we’re excited to support you every step of the way!  

Internet Links :

Technical note: Modernising the tax system through Making Tax Digital  – GOV.UK 

Making Tax Digital for Income Tax Self Assessment for sole traders and landlords – GOV.UK 

Use Making Tax Digital for Income Tax – Create digital records – Guidance – GOV.UK 

Making Tax Digital for Income Tax | The Association of Taxation Technicians