Making Tax Digital (MTD)
Contact an MTD specialist today
Making Tax Digital (MTD) is a government initiative designed to streamline the tax system. The scheme will make it easier for you to stay compliant and be in control of your tax affairs. It also marks the end of self-assessment tax returns and the introduction of quarterly updates.
If you are searching for clear, practical MTD support, we can help.
How MTD will impact your business
Under MTD rules, you are required to keep digital records and submit tax updates using approved third-party software, such as Xero. Paper records and manual submissions will no longer be accepted, and failure to comply may result in penalties.
MTD for Income Tax involves three main components: digital records, quarterly updates and a year-end declaration (similar to the current self-assessment return, but in a digital format).
With the right MTD accountant supporting you, the switch to digital reporting can be relatively straight-forward and disruption-free.
Find out what MTD means for youKey dates and thresholds for Making Tax Digital
The following dates and thresholds have been announced for MTD for Income Tax:
- From April 2026 – Sole traders and landlords with income exceeding £50,000
- From April 2027 – Sole traders and landlords with income exceeding £30,000
- From April 2028 – Sole traders and landlords with income exceeding £20,000
If you fall into one of the above categories, you will need to submit digital quarterly updates. Current payment dates (31st January and 31st July) will remain the same.
Preparing for MTD - how we can help you
Digitising your financial systems has become essential, not just for MTD compliance but for more efficient, accurate record keeping and informed decision-making. As a leading advisor on Making Tax Digital in the Midlands, we support clients across the region through tailored and practical guidance.
Make your MTD transition simple
The prospect of moving to MTD can be overwhelming, especially if you are unclear on what is involved. Our Business Services experts can help you understand what the changes mean in practice, evaluate your current systems and guide you through the process to becoming fully compliant.
Whether you are preparing your first quarterly report or need support in organising your digital records, we will ensure your MTD transition is seamless.
Digitise your accounts with cloud accounting
Cloud accounting is the easiest way to digitise your finances. By moving your records online, you benefit from:
- A real-time overview of your finances
- Fewer manual errors
- Simpler quarterly reporting
- Easier collaboration with our Business Services team
Cloud accounting enables our team to provide you with accurate and timely MTD support, giving you the reassurance that your financial information is always up to date.
Flexible support to meet your needs
We can support you at every stage of the MTD process. For many clients, we take care of everything, from preparing and reviewing returns to submitting them to HMRC.
Other clients prepare their own records for us to review and submit returns on their behalf. We also offer a submission-only service. If you plan to prepare the tax returns yourself, we can work with most existing software, provided it is MTD-compatible.
Xero: our recommended cloud accounting platform
As Global Xero Partners, we recommend Xero to all our clients. Xero is a market-leading, cloud-based accounting platform and our software of choice for many reasons, including its compatibility with a range of applications that help you get the most from cloud accounting.
Learn more about XeroMaking Tax Digital FAQ
Who needs to register for MTD?
Sole trader and landlords will need to register for MTD for Income Tax, in line with the thresholds and deadlines below.
- April 2026 onward – Income over £50,000
- April 2027 onward – Income over £30,000
- April 2028 onward – Income over £20,000
What happens if I do not comply?
If you do not comply with MTD rules, you are at risk of penalties from HMRC and increased administration costs.
Will MTD affect my payment dates?
No, MTD does not affect payment dates. The current payment dates of 31st January and 31st July will stay the same.
What software can I use for MTD?
There are several third-party software options compatible with MTD. While we recommend Xero to all our clients, we can still review and submit your tax returns if you use another MTD-compatible provider.
Who is exempt from MTD?
HMRC recognises that the tools required for Making Tax Digital are not suitable for every organisation and will assess potential exemptions on a case-by-case basis.
Making Tax Digital for Income Tax does not apply to any partnership profits or trust income.
Find out more about exemptions on the HMRC website.
Why PKF Smith Cooper?
As one of the Midlands’ leading accounting and advisory firms, PKF Smith Cooper provides expert MTD support to help you manage your finances more efficiently. We combine specialist tax guidance with practical assistance from our Business Services team to create a holistic service that makes Making Tax Digital compliance easier to manage.
With over 40 years’ experience supporting ambitious business owners, we will work closely with you to understand your needs. Our team will simplify the technical requirements and guide you through the process to ensure you stay MTD-compliant. If you are looking for a dedicated MTD accountant to help you transition to digital reporting, get in touch with us today.
