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

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Making Tax Digital (MTD) is one of the biggest shake-ups in the UK tax system in decades. It’s designed to make tax administration more efficient, but for many self-employed individuals and landlords, it also raises a simple but crucial question: “How will Making Tax Digital affect me?”

If you’re unsure what MTD means for you, when it starts, and how it will change the way you handle your taxes, this guide will break it down in plain English. We’ll also look at the challenges it creates – and why having an accountant on your side could save you time, stress, and money.

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What Is Making Tax Digital?

In short, MTD means moving away from annual paper or online tax returns. Instead, you’ll need to:

• Keep digital records of all your income and expenses.
• Submit quarterly updates to HMRC through MTD-compatible software.
• File an End of Period Statement (EOPS) to finalise your business or property figures.
• Make a Final Declaration, replacing the current Self Assessment return.

It’s not a new tax – but it is a new way of reporting your tax.

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Who Does It Affect – and When?

MTD for VAT is already in place, but the next stage is Making Tax Digital for Income Tax Self Assessment (MTD ITSA).

• From April 2026: Self-employed and landlords with gross income over £50,000 must comply.
• From April 2027: The threshold lowers to £30,000.

Gross income means your total income before expenses – so even if your profits are lower, you may still fall under MTD.

If your income is below £30,000, you won’t be required to join (for now), but you can opt in voluntarily.

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How Will Making Tax Digital Affect Me in Practice?

Here’s where many people start to feel the impact:

1. Quarterly Reporting Pressure

No more once-a-year scramble. You’ll need to send updates every three months. Missing deadlines could mean penalties.

2. Choosing the Right Software

You can’t just use spreadsheets or paper. HMRC requires MTD-compatible software, and the wrong choice could cause costly mistakes.

3. Digital Record-Keeping Challenges

If you’re used to shoeboxes of receipts or spreadsheets, switching to digital systems can feel overwhelming. One small error can ripple through all your reports.

4. Risk of Mistakes and Penalties

Quarterly reporting means more chances to make errors. HMRC penalties for late or incorrect submissions can quickly add up.

5. Time Away From Your Business

Every quarter, you’ll need to stop what you’re doing, organise your figures, and send reports. For busy self-employed workers and landlords, that’s valuable time lost.

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Why an Accountant Is More Crucial Than Ever

MTD is meant to simplify tax – but for many, it’s creating extra layers of admin. Here’s how an accountant can take the stress off your shoulders:

• ✅ Set you up with the right software and ensure it works smoothly for your needs.
• ✅ Handle quarterly submissions, so you don’t risk late fees or mistakes.
• ✅ Spot allowable expenses and tax reliefs you might miss, keeping your tax bill as low as possible.
• ✅ Save you hours of admin so you can focus on running your business or property portfolio.
• ✅ Provide real-time financial insights so you always know where you stand with HMRC.

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What Should I Do Now?

If your income is close to or above the £30,000–£50,000 thresholds, don’t wait until the last minute. You should:

1. Work out your gross income to see if MTD ITSA applies to you.
2. Explore MTD-compatible software (but don’t get stuck comparing dozens of options).
3. Get professional advice – an accountant can guide you through the transition, set everything up correctly, and take on the ongoing reporting.

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Conclusion

So, how will Making Tax Digital affect me?

If you’re self-employed or a landlord, it means more frequent reporting, mandatory digital record-keeping, and stricter deadlines. For many, it will feel like extra admin, more pressure, and greater risk of errors.

But with the right accountant, MTD doesn’t have to be a headache. By preparing early and getting expert support, you can stay compliant, avoid penalties, and keep your focus on growing your income – not battling with HMRC’s systems.

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👉 If you’d like help getting ready for Making Tax Digital, I can guide you through the process and manage your quarterly submissions for you. That way, you stay stress-free and HMRC-compliant.

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