Making Tax Digital (MTD)

HMRC are implementing a new system & laws around digital record keeping & reporting that will apply to millions of tax payers in a bid to make the UK’s taxation system one of the most digitally advanced in the world.

The tax office’s primary objective is to utilise digitalisation to make it easier for everyone to get their tax affairs right. Many other countries have already done this or have digital systems in development.

Does MTD apply to me?

If you’re a self-employed sole trader, CIS subcontractor, landlord or even a mix of the three & have a combined qualifying income in excess of £50,000 from these sources in the 25/26 tax year, you will be legally obliged to register for Making Tax Digital (MTD).

From April 2027, this threshold will be reduced & MTD will apply to anyone who’s qualifying income exceeds £30,000 in the 26/27 tax year with a plan to eventually reduce the threshold to £20,000.

What will my obligations be?

In addition to your annual self-assessment tax return (or what will become known as a Final Declaration), you will now be legally required to keep up to date, accurate digital records of all income & outgoings, which will need to be submitted to HMRC every quarter (Apr to Jun, Jul to Sep, Oct to Dec & Jan to Mar) from April 2026 onward.

Once registered for Making Tax Digital, you will be legally obliged to continue to report in this manner, unless your qualifying income falls & stays below the prevailing threshold for 3 consecutive tax years.

What to expect

Will this change how much or how often I pay tax?

Should you have any calculated tax liability, you’ll still pay tax at the appropriate rate with the same pre-existing deadlines applied as you’re used to. Whether that’s been once a year or more regularly through payments on account.

What are your fees?

There will be different payment terms & options available for CIS subcontractors, sole traders & landlords including a monthly Direct Debit & a discounted annual fee if paid up front. See details.

Why choose Bettertax?

We’ll manage the entire process with HMRC for you, supply all the digital resources & information you’ll need to keep track of your tax affairs as easily as possible before sending them to us to compile & submit to HMRC on your behalf.  

We’ll send reminders & go over calculations to avoid you incurring financial penalties for missing deadlines or potentially making errors on submitted reports.  

We’re putting everything in place now & currently running trials with some clients to ensure that we’re able to provide a fully managed MTD service with simple & efficient processes that will save you both time & money.

What’s included?

Unsure about Making Tax Digital (MTD)?

If you’re unsure about Making Tax Digital, if you have qualifying income & what you’ll need to do – don’t worry, just give us a call on 01280 821020 and we’ll walk you through it.