Making Tax Digital is HMRC’s big push to bring business tax into the digital age! The goal? To make managing taxes easier, quicker, and more accurate. Instead of keeping paper records and filling out forms once a year, businesses need to use compatible software to record income and expenses, submit quarterly updates, and keep everything digital.

For most businesses, MTD started with VAT. If you’re VAT-registered and your turnover is over £85,000, you already have to follow MTD rules. This means using software like Xero, QuickBooks, or FreeAgent to record transactions and send VAT returns digitally. Even businesses below that VAT threshold will soon need to comply, as MTD for VAT is gradually rolling out to cover more businesses.

Income Tax Self-Assessment (ITSA) is next up on the list! Starting in April 2026, self-employed individuals and landlords with an income over £50,000 will need to follow MTD for ITSA, with those earning over £30,000 joining in the following year. This means submitting quarterly income tax updates through MTD-compliant software.

The bottom line? MTD is here to stay, so now’s a great time to get comfortable with digital accounting. By using approved software, you’ll not only meet HMRC’s requirements but also make tax time way less stressful with everything automatically organized and ready to go!