Digital Accounting Solutions
Making Tax Digital Accountants: Digital Accounting Solutions for MTD Readiness
Making tax digital accountants for MTD for VAT and Income Tax: digital records, compatible software, automation and a 30/60/90-day plan. Book a consultation.
7+ years of professional experience · London SW11 office · Clients across England
At a glance
Making Tax Digital at a glance
Making tax digital accountants help UK businesses keep digital records, use HMRC-compatible software and send VAT returns, quarterly updates and tax returns on time. MTD for VAT already applies to every VAT-registered business. The first wave of MTD for Income Tax started on 6 April 2026, covering self-employed people and property owners whose qualifying income topped £50,000.
- MTD for Income Tax: over £50,000 from April 2026, £30,000 from April 2027, £20,000 from April 2028
- Quarterly updates are due by 7 August, 7 November, 7 February and 7 May
- Software products must be digitally linked, not re-typed
- Late submissions are penalised through a points system
- We support MTD compliance on Xero, QuickBooks and Sage
VAT return
Bookkeeping
Tax advice
What do making tax digital accountants actually do?
Making tax digital accountants set up, run and check the digital side of your tax: records, software, submissions and deadlines. Our MTD accountants bring those parts together through our digital accounting solutions.
- Working out whether, and from when, MTD applies to you
- Choosing software that holds your records and sends data to HMRC
- Connecting bank feeds, receipts and sales apps so records build themselves
- Reviewing figures before each VAT return or update goes out
- Keeping documents secure and paperless
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Package choice and set-up sit on our cloud accounting page, and routine recording with our bookkeeping services. This page covers readiness.
Who has to comply with MTD, and when?
Your obligation depends on your VAT status and, if you are a sole trader or landlord, your qualifying income. Work through these questions.
- Are you VAT-registered? If yes, MTD for VAT already applies to you.
- Are you a sole trader or landlord filing Self Assessment? If yes, MTD for Income Tax may apply. PAYE income, dividends, pensions and partnership profit shares do not count.
- What is your qualifying income? Add gross self-employment and property income before expenses. For jointly let property, only your share counts.
- Is it above a threshold? Compare it with the table.
- Could an exemption apply? Qualifying income of £20,000 or less is automatically exempt.
HMRC writes if you must start, but checking is your responsibility. It has said it will sign up anyone required for 2026/27 who has not done so, from September 2026. Partnerships are not yet in scope. Rental investors should also see our landlord tax support, while HMRC publishes a scope checker and guidance.
| Qualifying income | Tax year tested | MTD for Income Tax starts |
|---|---|---|
| Over £50,000 | 2024 to 2025 | 6 April 2026 |
| Over £30,000 | 2025 to 2026 | 6 April 2027 |
| Over £20,000 | 2026 to 2027 | 6 April 2028 |
How does MTD for VAT work today?
MTD for VAT means a VAT-registered business keeps its VAT records digitally and sends VAT Returns to HMRC through compatible software. HMRC says all VAT-registered businesses should now be signed up. The rules are in VAT Notice 700/22.
Where more than one product handles your VAT data, digital links must carry figures between them. Re-typing them breaks the chain.
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If you are also within MTD for Income Tax, check your VAT software can serve both. Our tax services cover the returns themselves.
How does MTD for Income Tax work?
MTD for Income Tax replaces a once-a-year routine with a cycle that runs all year:
- Digital records: income and expenses for each self-employment and property business, held in compatible software.
- Quarterly updates: summaries due by 7 August, 7 November, 7 February and 7 May. Each covers the tax year to date, and a nil update is still required.
- Adjustments: after the fourth update, reliefs, disallowable expenses and capital allowances are applied.
- Tax return: filed in the software before the 31 January that follows each tax year end, once dividends, savings interest and other income are included.
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Quarterly updates are summaries, not tax returns, and MTD does not change when you pay tax. Businesses with a 31 March year-end can choose calendar update periods. For 2026/27, the update covering 6 April to 5 October is due by 7 November 2026.
Our blog has a full 2026 preparation guide, and HMRC sets out each stage in its step-by-step user guide.
What are digital records and digital links?
A digital record is an income or expense entry created and stored in compatible software. Digital record keeping does not replace paperwork: you must still keep bank statements, invoices and other supporting documents, or copies.
A digital link is an electronic transfer of data between products. These count:
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- Linked cells or formulas between spreadsheets
- CSV or XML import and export
- Automated transfers and API connections
Software that never creates your self-employment or property records, such as a booking system, does not need linking.
Which software and automation does a small business need?
Most small businesses need one core product plus a few connected tools. HMRC describes two kinds of MTD software: products that create digital records, and bridging software that connects existing spreadsheets. You can use several products, but only one per submission.
Core ledger
Cloud software that records transactions and sends submissions. Xero, QuickBooks and Sage are all part of our toolkit; installation steps live on the cloud accounting hub.
Bank feeds
Transactions import automatically, though you may add categories and must check accuracy before sending.
Receipt capture
Scanning receipts records expenses when they happen, not months later.
Payment and sales integrations
Payment processors and shop platforms can feed sales into the ledger. Our e-commerce VAT checklist helps.
Bridging software
If you stay on spreadsheets, MTD bridging software can send the data, with less automation.
Dashboards and reporting
Reporting apps turn the ledger into cash-flow views. For deeper analysis, management reporting takes these views further.
Free MTD software may cap transactions. Check it supports your income sources, accounting period and VAT. HMRC’s page on choosing MTD software helps.
How do you go paperless and keep client data secure?
A sound paperless setup rests on a few habits:
- Secure document exchange: encrypted sharing or a portal, not loose attachments
- E-signing: engagement letters and approvals signed electronically with a dated record
- Access control: unique logins, two-step verification, access removed when people leave
- Retention: supporting documents stored once and kept for the period tax law requires
- Backups: a tested copy held separately
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Financial records are personal data, so UK GDPR basics apply: collect only what you need and keep it secure. The ICO has advice for small organisations, and the NCSC offers a small business cyber security guide.
Penalties and exemptions: do you need making tax digital accountants?
MTD penalties are points-based. For MTD for Income Tax, each missed quarterly update or tax return deadline earns a point, and reaching 4 points brings a £200 penalty, with a further £200 for each later miss.
For VAT, each late return earns a point and a £200 penalty follows at the threshold: 2 points for annual, 4 for quarterly and 5 for monthly filers.
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You may be exempt if your qualifying income is £20,000 or less, you had no National Insurance number before the tax year began, or you are digitally excluded through age, disability, religious belief or lack of internet access. Unfamiliarity with software is not enough. Exempt people still file Self Assessment, per HMRC’s exemption guidance. Beyond compliance, saving tax is a separate conversation, covered under tax services.
How ready are you? A checklist and 30/60/90-day plan
This indicative plan shows how readiness work can be phased. Timings depend on your records.
- I know my qualifying income for each tax year
- Sign-up or agent authorisation is complete, if required
- My software covers every income source and my VAT
- Bank feeds are connected and categories mapped
- Nothing is re-typed between products
- Deadline reminders are in the diary
Days 1 to 30: confirm and choose
Confirm which rules apply, check qualifying income, agree software and roles.
Days 31 to 60: connect and clean
Link bank feeds, tidy opening records and set categories.
Days 61 to 90: test and go live
Review a period of figures, finish sign-up and set reminders.
Ongoing: review each quarter
Reconcile and approve before each submission.
Making tax digital accountants in London and across England
Based in Battersea at International House, 66 Lavender Hill, London, SW11 5RQ, we look after clients nationwide, meeting face to face or working remotely. Our clients include sole traders, landlords, contractors, freelancers, e-commerce sellers and limited companies. Read more about MTA Accountants or browse the areas we serve, including Croydon, Westminster and Redhill.
Listed compliance prices begin at £120 for a Self Assessment return, £100 for a VAT return and £50 an hour for bookkeeping. Quotes vary with workload and record quality, and any initial configuration is billed separately. Contact us about MTD quarterly support. These making tax digital services sit within our wider services, including payroll.
Do I need making tax digital accountants, or can I do MTD myself?
Nothing in the rules forces you to hire one. You can run compatible software yourself, but you stay responsible for accurate records and on-time submissions. An accountant helps with categorising transactions, year-end adjustments, deadlines and checking figures before they reach HMRC.
Is MTD for Income Tax based on turnover or profit?
It is based on gross income, not profit. Qualifying income is your total self-employment and property income before expenses, taken from your Self Assessment return. Employment, dividends, pensions and a partner's profit share are excluded. For jointly owned property, only your share counts.
Does MTD for Income Tax apply to partnerships?
Not yet. HMRC says partnerships will need to use it in future and will announce the timeline later. An individual partner's share of partnership profit does not count towards qualifying income. A partner's own sole trader or property income can still bring them into MTD.
How does a quarterly update compare with the annual tax return?
A quarterly update is a summary of income and expense totals, sent through software every three months. It is not a tax return and does not change when you pay tax. The tax return comes after the year ends, by 31 January. You must send updates even when you had no income or expenses in a period.
Can I keep using spreadsheets for MTD?
Yes, if you add MTD bridging software that reads your spreadsheet and sends the data to HMRC. The spreadsheet and bridging product must be digitally linked, for example through formulas, imports or an API. Spreadsheets give less automation than cloud software.
What counts as a digital link, and is copy-and-paste allowed?
A digital link is an electronic transfer of data, such as linked spreadsheet cells, CSV or XML imports, or an API. For MTD for Income Tax, once a record has been sent in a quarterly update you must not move it by copy-and-paste, cut-and-paste or by writing it out again in other software.
What happens if I miss a quarterly update deadline in 2026/27?
HMRC will not apply penalty points for late quarterly updates in 2026/27, but you must send them before you can submit your tax return. From later years, each missed deadline earns a point, and reaching 4 points brings a £200 penalty. Late tax returns and late payments are still penalised in 2026/27.
Can I be exempt because I am not comfortable with computers?
Not on that basis alone. HMRC accepts digital exclusion where age, disability, religious belief or lack of internet access makes using software unreasonable. It will not accept being unfamiliar with software, having filed on paper before, or having few records. Applications are judged case by case.
Is it safe to share financial documents digitally?
It can be safer than email attachments or paper if you use encrypted sharing or a secure portal, unique logins and two-step verification. Financial records are personal data, so UK GDPR principles apply: collect only what you need and keep it secure. The ICO and NCSC publish free guidance for small organisations.
How much does MTD support cost?
Compliance work is priced from £120 per Self Assessment tax return and £100 per VAT return, and bookkeeping from £50 an hour. Your quote reflects the scope and how complete your records are, and set-up is charged on top. For MTD quarterly update support, contact us for a quote.
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MTA Accountants
International House, 66 Lavender Hill, London, SW11 5RQ
Phone: 020 3488 8635
Email: office@mtaaccountants.co.uk
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