Diploma in Professional Accounting
Diploma for Financial Advisers
Member of London Institute of Banking and Finance

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Do I need to use MTD? Do I need to register for MTD? If you’re a sole trader, landlord, or run a VAT-registered business in the UK, these are probably the questions on your mind. The short answer is: in most cases, yes. Making Tax Digital (MTD) is a government initiative designed to simplify tax, reduce errors, and make reporting easier.

This guide explains who needs to use MTD, when you need to register, and why working with an accountant can save you stress, time, and potentially money.

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What is Making Tax Digital (MTD)?

Making Tax Digital is HMRC’s programme to modernise the UK tax system. Instead of relying on paper records or once-a-year tax returns, MTD requires businesses and individuals to:

• Keep digital records of income and expenses.
• Submit returns and updates to HMRC using MTD-compatible software.
• Report quarterly instead of just annually.

The aim is to reduce mistakes, increase accuracy, and make the tax process more efficient.

So, if you’re asking “Do I need to register for MTD?”, the answer depends on whether you fall under VAT, income tax, or both.

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Who Needs to Use MTD and When?

MTD for VAT

If your business is VAT-registered, you already need to be using MTD.

• Since April 2019, most VAT-registered businesses above the VAT threshold have had to comply.
• Since April 2022, all VAT-registered businesses — even those voluntarily registered — must use MTD.

That means if you haven’t already done so, you must register for MTD for VAT and submit your VAT returns digitally.

MTD for Income Tax (ITSA)

This is the next major stage of MTD and will impact sole traders and landlords.

• From April 2026: If you earn more than £50,000 from self-employment and/or property, you must use MTD for Income Tax.
• From April 2027: If you earn more than £30,000, you will also need to comply.

This means keeping digital records and sending quarterly updates to HMRC instead of one annual Self Assessment return.

If your income is below £30,000, you don’t currently need to register, but you can choose to join MTD voluntarily.

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Do I Need to Register for MTD?

If you’re VAT-registered, yes — you already should be registered.
If you’re a landlord or sole trader earning over the thresholds (from 2026 onwards), yes — you will need to register.

Failing to do so could result in HMRC penalties, so it’s best to get prepared early.

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Why MTD Can Be Tricky (and How an Accountant Helps)

Although MTD is designed to make tax simpler, many businesses find it overwhelming. Common challenges include:

• Choosing the right MTD-compatible software.
• Switching from paper records or spreadsheets to a fully digital system.
• Managing quarterly submissions on time.
• Understanding new HMRC rules.

This is where an accountant can make a real difference. They can:

• Recommend and set up the best software for your needs.
• Ensure your digital records are accurate from day one.
• Handle quarterly submissions to HMRC on your behalf.
• Keep you compliant while spotting opportunities to save tax.

For many sole traders, landlords, and small businesses, outsourcing MTD compliance means peace of mind and more time to focus on running the business.

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Going It Alone

Some business owners try to manage MTD themselves to save costs, but this often leads to:

• Confusion around the rules.
• Mistakes in submissions that can trigger penalties.
• Wasted hours learning how to use new software.
• Missed tax-saving opportunities.

If you’re already asking “Do I need to use MTD?” or “Do I need to register for MTD?”, the answer is probably yes — but you don’t need to face it alone.

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Don’t Go It Alone with MTD

So, do you need to use MTD? If you’re VAT-registered, the answer is already yes. If you’re a sole trader or landlord earning above £50,000 (from 2026) or £30,000 (from 2027), the answer will soon be yes.

Do you need to register for MTD? If you fall into one of these groups, absolutely.

While MTD may feel like another burden, it’s an unavoidable step towards a modern tax system. The real choice isn’t whether you need MTD, but whether you’ll handle it yourself — or get expert help to make the process stress-free and fully compliant.

Working with an accountant ensures your MTD setup runs smoothly, avoids mistakes, and could even uncover valuable tax-saving opportunities.

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