Making Tax Digital is changing how many sole traders and landlords keep records, send updates to HMRC and complete their annual tax return. Yorkshire Accountancy can help you check whether the rules apply, choose suitable MTD-compatible software, organise your digital records and manage the ongoing submissions.
Whether you want a fully managed Making Tax Digital service or simply need help getting your existing bookkeeping ready, our accountants will give you straightforward, practical support. We work with clients across Yorkshire and the UK, including sole traders, landlords, property investors, small businesses and people with more than one source of taxable income.
You may need Making Tax Digital support if you are a sole trader, landlord, or both, and your qualifying income is above the relevant threshold.
MTD for Income Tax currently applies from:
| Start date | Qualifying income |
|---|---|
| 6 April 2026 | More than £50,000 |
| 6 April 2027 | More than £30,000 |
| 6 April 2028 | More than £20,000 |
Qualifying income generally means your gross income before expenses from self-employment and property. If you have more than one sole trade, or you are both self-employed and a landlord, these income sources are normally combined when deciding whether you are above the threshold.
You do not have to wait until your first deadline to get ready. If your income is close to a threshold, your records are still on spreadsheets or paper, or you are unsure how your property and self-employment income should be reported, it is sensible to review your position early.
We can check:
Making Tax Digital for Income Tax does not mean completing four full tax returns each year. The quarterly updates are summaries of income and expenses created from your digital records.
The standard quarterly update deadlines are:
| Update period | Deadline |
| First quarterly update | 7 August |
| Second quarterly update | 7 November |
| Third quarterly update | 7 February |
| Fourth quarterly update | 7 May |
Your final tax return is still due by 31 January after the end of the tax year. MTD changes how records and submissions are made, but it does not change the Self Assessment payment deadline.
Making Tax Digital, usually shortened to MTD, is HMRC’s programme for moving tax records and submissions into compatible digital software.
Making Tax Digital for Income Tax requires affected sole traders and landlords to:
MTD for Income Tax is separate from MTD for VAT. If you are VAT registered, you may already use software for VAT returns, but that does not automatically mean the same setup is suitable for MTD for Income Tax. We can review your existing software and bookkeeping process to see whether it covers both obligations.
MTD for Income Tax applies to individuals registered for Self Assessment who receive income from self-employment, property, or both, and whose qualifying income is above the relevant threshold.
This can include:
Partnerships do not currently need to use MTD for Income Tax, although individual partners may still need to consider their own separate self-employment or property income. Limited companies are not within MTD for Income Tax, but may have separate Corporation Tax, VAT and company accounts obligations.
If you are unsure whether HMRC’s records are correct, we can check your position before you sign up or before HMRC signs you up automatically.
Software is only one part of Making Tax Digital. The bigger issue is making sure the information going into the software is complete, correctly categorised and submitted on time.
As your MTD accountant, we can help with:
If more than one adviser is involved, HMRC allows for different agent roles. For example, one adviser may help with bookkeeping and quarterly updates, while another acts as the main tax agent for the final return. We can explain what access is needed and make sure responsibilities are clear.
You can choose the level of support that suits your business, property portfolio and existing bookkeeping arrangements.
Our fully managed service is designed for sole traders and landlords who want us to handle the ongoing MTD process.
Depending on the service you choose, we can help with:
You will have an experienced accountant to contact when you have questions, rather than being left to work through the rules by yourself.
If you want to manage your own bookkeeping, we can help you put the right system in place.
Our setup service can include:
We work with several popular accounting platforms, including Xero, QuickBooks, FreeAgent and Pandle. We will recommend an appropriate option based on your circumstances rather than pushing you towards unnecessary features.
Read our guide to Making Tax Digital software options.
Using MTD does not necessarily mean giving up spreadsheets.
If spreadsheets are already an effective part of your bookkeeping, it may be possible to continue using them alongside compatible bridging software. Bridging software connects your digital records with HMRC and allows the required information to be submitted.
We can:
Find out more in our guide to Making Tax Digital bridging software.
If you prefer to keep your own records and submit your own updates, our quarterly health-check service provides an extra layer of reassurance.
We can review your bookkeeping before each submission to:
This can be particularly helpful during your first year of MTD or when you are getting used to new accounting software.
Keeping accurate, up-to-date records is one of the most important parts of Making Tax Digital.
Your digital records should normally include the amount, date and category for income and expense transactions. The categories used for MTD for Income Tax broadly follow Self Assessment categories, so bookkeeping accuracy matters throughout the year rather than only at tax return time.
Our bookkeeping service can take care of the day-to-day work, including:
Outsourcing your bookkeeping can give you clearer financial information throughout the year while reducing the amount of administration you need to handle.
If you are a sole trader, MTD may change how frequently you need to update your bookkeeping.
Waiting until the end of the tax year to gather receipts and bank statements will no longer be a practical approach once you are required to submit quarterly updates. If you have more than one sole trader business, you may need separate digital records and separate quarterly updates for each business.
We can help you:
Our approach is designed to make MTD part of your normal accounting process, rather than an additional administrative burden every three months.
MTD for Income Tax applies to qualifying property income as well as self-employment income.
The rules may affect individual landlords with income from:
Landlords need to be careful about how property income and expenses are recorded. UK properties are normally treated as one UK property business, while foreign property income may need separate records before being brought together for reporting. Jointly let properties can also need special handling, particularly where expenses are not included in quarterly updates and need to be dealt with after the end of the tax year.
We can help you maintain digital records, record rental income and expenses correctly, review jointly owned property records and prepare the information required for your quarterly updates and annual tax return.
Visit our dedicated guide to Making Tax Digital for landlords for more information.
There is no single accounting package that is right for every sole trader or landlord.
The most suitable option will depend on:
Some people will benefit from a full cloud-accounting package. Others may only need a well-structured spreadsheet and bridging software.
We will help you choose a practical and proportionate solution.
Quarterly updates do not replace your annual tax return.
At the end of the tax year, your MTD software will still need to include all relevant income, claims, allowances and adjustments before the final tax return is submitted. HMRC may add some information it already holds, such as PAYE income, pensions, student loan details, CIS deductions or certain capital gains information, but you must still check that the final return is complete and accurate.
You may also need to add items such as:
We can complete this final stage for you, explain the calculation and make sure the return is submitted before the 31 January deadline.
Making Tax Digital introduces a points-based penalty system for missed submission deadlines.
For the 2026/27 tax year, HMRC has said it will not apply penalty points for late quarterly updates, but you will still need to send the quarterly updates before you can submit your tax return. Penalties can still apply for late tax returns and late payment of tax.
After the first year, missing quarterly update deadlines can lead to penalty points. If you reach the penalty threshold, a financial penalty can apply. This makes a reliable bookkeeping and submission routine important, even where no additional tax is due at the quarterly update stage.
We can help you keep track of deadlines and reduce the risk of avoidable penalties.
Some people are exempt from Making Tax Digital for Income Tax automatically, while others need to apply to HMRC.
Possible exemption areas include:
Being unfamiliar with software, having only a small number of records or preferring paper records will not usually be enough on its own. If you think an exemption may apply, we can help you review the position and understand what HMRC is likely to need.
The best time to prepare for MTD is before your first quarterly update becomes due.
Starting early gives you time to choose suitable software, organise your records, test your bookkeeping process and understand what information your accountant will need from you each quarter.
A practical MTD preparation plan should include:
Speak to Yorkshire Accountancy today for a clear, practical MTD plan.
MTD can feel complicated, especially if you are unfamiliar with accounting software. We explain what the rules mean in plain English and tell you exactly what you need to do.
You can ask us to manage the entire process or only the parts where you need assistance. We will build the service around your existing records, confidence and available time.
Your MTD records and submissions form part of your wider tax position. Working with qualified, experienced accountants means your bookkeeping, quarterly updates and year-end tax return can be considered together.
We work with cloud-accounting packages, bookkeeping systems, spreadsheets and bridging software. Our priority is finding a system that works for you.
Making Tax Digital requires more regular record keeping. Our team is available throughout the year to answer questions and help you deal with problems before they reach your year-end tax return.
Yorkshire Accountancy provides Making Tax Digital support to sole traders, landlords and small businesses throughout the UK.
We work with clients in Hull, York, Leeds, Sheffield and across the wider Yorkshire region, as well as clients who prefer to work with us remotely.
With secure digital records, cloud-accounting software, telephone support and online meetings, you can work with our MTD accountants wherever you are based.
Whether you need help choosing software, checking your records or managing every MTD submission, Yorkshire Accountancy is here to help.
Contact us for friendly, straightforward advice and a service tailored to your needs.
Please call or email to arrange your FREE consultation for any of our services.
We’re a modern, friendly and proactive accountancy service.
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