Making Tax Digital (MTD) is on it’s way, so now is the time to ensure you understand what’s on the horizon, what you need to do, and how the Vantage Accounting team are ensuring everything is ready.

In this blog we take a closer look at what MTD actually is, how we’re preparing for the deadline, and what your Vantage Client Director can do to help you.

What is Making Tax Digital?

Making Tax Digital (MTD) has been created by the government’s central Tax Administration Strategy in a bid to modernise the UK tax system. It has been designed to reduce the tax gap by requiring individuals and business owners to:

• Keep their records digitally
• Only use compatible software to manage their tax affairs
• Submit quarterly updates, that’ll bring the tax process closer to real-time

Making Tax Digital for Income Tax

MTD for VAT-registered businesses was introduced back on 1 April 2019, in the attempt to improve tax reporting accuracy, reduce human error, and modernise UK tax system. HMRC’s main goal is to create a more efficient and transparent system, which makes it simpler for business owners to get their taxes correct. This initiative has been extended to MTD for Income Tax from 6 April 2026.

MTD: What is happening and when?

HMRC will soon be communicating to affected taxpayers about the upcoming changes.

What you need to know about MTD:

April 2025: Landlords and Sole traders with relevant income can voluntarily start providing updates and implementing digital processes ahead of the mandatory deadline.

Here at Vantage we will be inviting a cross-section of clients to be part of this beta testing and helping us to navigate the new legislation.

April 2026: MTD becomes mandatory if you are self-employed or a landlord and have an annual business or property income of more than £50,000.

April 2027: The threshold lowers to £30,000.

It is expected that around 780,000 people with business or property income over £50,000 will join the MTD for ITSA service from April 2026, with a further 970,000 joining from April 2027.

How will this affect you?

1. Digital Record-Keeping

Using MTD-compatible software, you’ll need to keep financial records digitally. This means if you’re currently using manual spreadsheets or paper records, you’ll need to move away from these.

2. More Frequent Submissions

Instead of submitting one annual self-assessment tax return to declare your year’s income and expenses, you will also need to submit quarterly updates to HMRC. This means you will need to stay on top of your bookkeeping more regularly throughout the year. Your Vantage Client Director can show you your options on how this can be achieved.

3. Compliance requirements

MTD will be introducing more stringent compliance rules, including digital links between systems. You’ll no longer have the capability to copy and paste figures between spreadsheets and instead need the appropriate systems in place that talk to each other in a compliant way.

How we can help you

As we move through the testing phase and up until April 2026, we’re continuing to build our expertise around the new legislation. As your trusted accountants, we’re still here to support you every step of the way with Making Tax Digital. We understand that adapting to new digital tax requirements can feel overwhelming, but our priority is to make the transition as smooth and stress-free as possible.

Whether you need help choosing the right software, understanding submission deadlines, or ensuring your records meet HMRC’s standards, your Vantage Client Director is here to provide expert guidance and practical solutions tailored to your business.

Let us take the complexity out of MTD so you can focus on what you do best – running your business. Get in touch if you have any questions, or want to discuss MTD in greater detail.