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Making Tax Digital for VAT & Income Tax
Help with Making Tax Digital VAT & Income Tax
Our specialist tax accountants for MTD guide businesses and individuals through Making Tax Digital for VAT and Income Tax. We provide tailored advice, reduce compliance risks, and ensure you stay fully aligned with HMRC’s MTD rules while minimising stress and errors.
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What is Making Tax Digital (MTD)
Making Tax Digital (MTD) is a government initiative aimed at modernising the UK tax system. It requires individuals and businesses to maintain digital records and submit their tax returns using compatible software. The primary goals of MTD are to reduce errors, enhance efficiency, and provide taxpayers with better visibility of their obligations. Currently, MTD applies to VAT and will be rolled out in phases for Income Tax Self Assessment (ITSA). This initiative is designed to ensure compliance while simplifying the tax reporting process.
How to Register for Making Tax Digital
To register for Making Tax Digital (MTD), you must sign up with HMRC and use software that can submit your VAT or Income Tax returns. This process helps you keep digital records and file your updates online. You can register through the HMRC portal, where individuals, businesses, and agents can enrol. By registering early, you ensure compliance, reduce errors, and gain the efficiency of managing tax digitally with HMRC-approved solutions.
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Honesty guides everything we do. We believe in transparent advice, accurate reporting, and doing what’s right for our clients every time.
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Every client matters. We take time to listen, understand your needs, and deliver personalised tax solutions with care and attention to detail.
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We are a team of specialist tax advisors who are delivering expert guidance on tax compliance, international tax, HMRC investigations, business structuring, capital gains, inheritance tax, corporation tax and self assessment services.
We know personal taxes can be overwhelming. With us, your returns are accurate, on time, and tailored to your unique life.
We know running a business is hard enough. Let us handle your business taxes so you can focus on growth with confidence.
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We know living abroad brings tax challenges. Whether in or out of the UK, we make your expat taxes smooth and stress-free
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What is Making Tax Digital (MTD)?
Making Tax Digital (MTD) is a UK government program from HMRC. It requires individuals and businesses to keep their tax records online and submit their tax returns using approved software. The goal is to make tax filing easier, more accurate, and less stressful.
For example, VAT-registered businesses now store their records digitally and file VAT returns using software recognised by HMRC, instead of using paper receipts or manual spreadsheets. By 2026, self-employed individuals and landlords who earn over £50,000 will also need to follow MTD rules for Income Tax Self Assessment (MTD ITSA).
At Tax Accountant, our experienced tax accountants help clients transition smoothly. We set up the right software, train you on digital record-keeping, and ensure compliance with HMRC requirements. Whether you run a small shop, own rental properties, or freelance, we make MTD simple so you can focus on growing your income.
Who needs to register for MTD for VAT?
If your taxable turnover is above £85,000, you must register for Making Tax Digital for VAT. Even if your turnover is below this threshold, you can voluntarily sign up to simplify your record-keeping.
Registration is done online through HMRC’s portal. Once registered, you’ll need MTD-compatible software to keep records and submit returns. This applies whether you’re a sole trader, a partnership, or a limited company.
At Tax Accountant, we guide you step by step. Our team registers your business with HMRC, sets up VAT-compliant software, and ensures you file returns on time. With our expertise, you avoid errors and late penalties while maintaining full compliance.
What is MTD for Income Tax (MTD ITSA)?
Starting in April 2026, MTD ITSA will apply to self-employed individuals and landlords who earn more than £50,000 a year. Instead of filing one tax return each year, you will need to submit updates every quarter and a final statement at the end of the year, all done online.
This means keeping records in MTD software, tracking rental income or business expenses, and staying on top of deadlines. At Tax Accountant, we make MTD ITSA stress-free. Our tax accountants help you set up digital tools, manage quarterly submissions, and prepare the final statement. By staying compliant, you reduce audit risks, avoid fines, and save time.
How does MTD affect Capital Gains Tax (CGT)?
MTD (Making Tax Digital) currently focuses on VAT and Income Tax, but Capital Gains Tax (CGT) is also moving towards digital reporting. For instance, if you sell property in the UK, you must report the sale online within 60 days. HMRC plans to expand digital reporting for CGT in the future.
This means landlords and investors need digital systems to track gains, losses, and deadlines. Missing a CGT filing can result in penalties. Our specialists at Tax Accountant help clients calculate gains, report disposals online, and stay ahead of changing HMRC rules. We ensure your CGT obligations are met alongside VAT and Income Tax compliance.
What happens if I don’t follow MTD rules?
Non-compliance with MTD can lead to penalties. From April 2025, HMRC is introducing a points-based system: missing deadlines earns penalty points, and once you hit a limit, you’ll face fines.
For VAT, late filing or non-digital submissions can trigger penalties. For MTD ITSA, missing quarterly updates or failing to use the software will result in fines once the rules take effect.
At Tax Accountant, we help clients avoid penalties by making sure they submit everything on time and follow the right software rules. We take care of your deadlines, file your documents for you, and offer ongoing support to keep you penalty-free.
What software is required for MTD?
MTD requires HMRC-approved software. This can include cloud accounting platforms like Xero, QuickBooks, Sage, or bridging software that links spreadsheets to HMRC’s system.
The software must be able to:
- Keep digital records
- Submit VAT or Income Tax returns
- Communicate with HMRC digitally
Our team at Tax Accountant helps you choose the right MTD software for your business. We handle the setup, integration, and training so you can manage records confidently.
How do quarterly updates work under MTD ITSA?
Instead of submitting one annual tax return, MTD ITSA requires you to report your income and expenses every quarter. This means HMRC can see your tax situation in real time. At the end of the year, you will submit a final declaration to confirm your total income and deductions.
Quarterly submissions may feel like extra work, but they actually make budgeting easier by breaking tax into smaller, manageable updates. Our accountants at Tax Accountant prepare and file quarterly updates for you. We keep everything accurate, reducing your stress and freeing up time to focus on running your business.
How does MTD apply to landlords?
If you earn rental income over £50,000 annually, you’ll need to follow MTD ITSA rules from April 2026. This means keeping digital records of rental income, expenses, and filing quarterly updates.
Landlords with multiple properties often find it challenging to track expenses. Under MTD, digital tools streamline this process more effectively. At Tax Accountant, we help landlords digitise rental accounts, manage submissions, and ensure all expenses are properly claimed. You stay compliant while maximising your rental profits.
Can I still use spreadsheets for MTD?
You need MTD bridging software to submit VAT or Income Tax data to HMRC. A simple spreadsheet alone does not meet their requirements. Bridging software connects your spreadsheet directly to HMRC. This option is helpful for businesses that are not yet ready to switch fully to cloud accounting.
Our tax specialists at Tax Accountant can set up bridging software, train you, and manage submissions so you stay compliant while keeping your familiar spreadsheet system.
How can a Tax Accountant help with MTD?
A tax accountant does more than file returns. With Making Tax Digital (MTD), accountants help businesses and individuals meet digital compliance requirements.
We at Tax Accountant offer:
- Registration with HMRC for MTD VAT and ITSA
- Software setup, training, and support
- Quarterly and annual submissions
- CGT digital reporting assistance
- Penalty protection and compliance monitoring
When you partner with us, you can relax knowing that we will take care of the technical and regulatory aspects of Making Tax Digital (MTD). This allows you to concentrate on running your business or managing your investments. We aim to simplify the tax process, reduce your stress, and save you money.