Making Tax Digital : What it means for you.

May 19
3 min read

Updated: Jun 3

Let’s Keep It Simple

Tax is often put across to be a mystery with overly convoluted acronyms, or explanations that don’t really explain anything at all, let’s stick to the facts, keep it plain and simple.

So what Is Making Tax Digital (MTD)?

Why do we have to make our submissions digitally Whenever we even hear the word ‘tax’ it almost sends a shiver down the spine, but MTD is a friend, sent to make our lives a lot easier. MTD is a UK government initiative by HMRC to modernise the tax system by requiring many businesses and individuals to keep digital tax records and submit tax information online using compatible software. Enter stage left, your trusty Bookkeeper to guide you through the whole process.

MTD Key Dates and Deadlines

MTD is making tax easier, and this is when you’ll need to do it. However, getting a head start is always recommended, we don’t want to leave things to the last minute:

MTD for VAT registered businesses is already in place, since April 2022.
MTD for Income Tax – Businesses with over £50k per annum turnover is already in place, since April 2026.
MTD for Income Tax – Businesses with over £30k per annum turnover mandatory by 6th April 2027.
MTD for Income Tax – Businesses with over £20k per annum turnover mandatory by 6th April 2028.

Even if your due date seems a lifetime away, it will creep up and be there before you know it. So it's prudent to get things sorted now, having a robust system with a Bookkeeper makes the system work for you, not you working for the system.

How MTD Will Benefit Your Business?

I remember, many moons ago, the days of paper ledgers and long, endless spreadsheets, it was a nightmare. Using compatible software and keeping digital tax records is a change, but a change for the better, making day to day finance admin so much simpler, accurate and transparent, again making the system work for you, saving time so you can get on with your business as usual.

How to Get Ready for MTD (Without the Stress)

So what do we need to do? This is where the process becomes a lot less complicated, in essence, it’s simple. Moving from manual to digital recording can happen in these easy steps:

Find your software. What will work for you? Well, systems like FreeAgent offer their services for free when you bank with RBS, NatWest, Ulster Bank or Mettle, with other bank accounts, monthly cost can be £19 to £33 per month. Xero and QuickBooks offer services for sole traders ranging from £7 to £15 per month and for limited companies between £37 and £40 per month, depending on the usage.*
Use an onboarding service from your bookkeeper to get you started without the hassle, we’re accredited practitioners on all of the main systems so we can guide you through the process minus the pain.
Once you’re all set up, record digital receipts! I cannot emphasize this enough, using a digital method to record receipts as and when you purchase is key. There’s another blog about this so I won’t go on, but do yourself a favour and record while you go.
Lastly, remember that MTD is a friend, it’s a different way of doing things, but it will make your life so much easier and you won’t have to wait until the end of the year for that pesky tax bill you thought would be £100, and it turns out to be £500. Submitting quarterly will ensure HMRC have all they need and your business will have a healthy cashflow with no nasty surprises.

Need Help Getting Set Up for MTD?

MTD is nothing to panic about, once you’re all set up you can leave the admin to your bookkeeper, even an hour a week can give you back time to run your business or even take that break you deserve! So why not give a go, get in contact and we can have a chat to get you all set up and ready to go.

*Prices correct at time of publishing

How Can We Help?