All VAT registered businesses must comply with Making Tax Digital (MTD) rules regardless of their turnover. However, from the 6th of April 2026, MTD was also made mandatory for self employed individuals and landlords with income of £50,001 or above. The £50,001 threshold is based on income received before expenses are deducted, not profit. This does not apply to businesses operating as a limited company.
In addition, from the 6th of April 2027 the qualifying income threshold will be reduced to £30,000, bringing more self-employed individuals and landlords within the scope of MTD. If you are or will qualify for Making Tax Digital but you need some extra support, get in touch with our team at 360 Accountants. We have helped hundreds of businesses smoothly transition, including many that have chosen to early adopt.
What Making Tax Digital Actually Means
Making Tax Digital (MTD) is HM Revenue and Customs’ (HMRC) move to require businesses to keep digital records and submit tax information through approved software to improve accuracy and efficiency. MTD will not only modernise the UK tax system but it will lower the likelihood of mistakes when people submit their tax returns.
Under Making Tax Digital, businesses are required to store all sales and purchase invoices on MTD compliant accounting software, so that HMRC can easily perform compliance checks, and send up to date tax estimates. Businesses will need to send quarterly income and expense updates and submit an end of year tax return. Furthermore, due to the modernised system, tax surprises will be reduced if you were not previously using accounting software to track your business’ performance.
Who Must Comply with Making Tax Digital
MTD applies to all VAT-registered businesses, as well as individuals and landlords with annual income (revenue, not profit) of £50,001 or above. This includes combined self-employment and landlord income. For example, if you have £26,000 of self-employment income and £26,000 of rental income, you must comply.
New thresholds are planned for April 6th 2027 and 2028, these thresholds are £30,000 (2027) and £20,000 (2028) this will push more people into digital tax. The only exemptions to MTD are:
- You are unable to use digital tools due to disability, or another health condition.
- Your age affects your ability to use digital tools.
- You live in an area where internet access is not available.
- You have religious objections to using digital tools.
HMRC has written to all affected taxpayers asking them to register for MTD. You should have registered by 6 April 2026.
The first quarterly submission will cover the period 6/4/26 to 5/7/26 and must be filed with HMRC by 7/8/26. This submission must include your income and expenses.
How 360 Accountants Support MTD Compliance
At 360 Chartered Accountants, we understand that transitioning to digital tax can be challenging, particularly for businesses and individuals who are unfamiliar with digital accounting systems. Our team can help you choose the most suitable MTD compliant accounting software based on your specific needs and requirements. We also assist with the setup and implementation of the software, ensuring that your digital records are maintained correctly from the beginning. For clients who would like to manage their own bookkeeping, we provide training and guidance to help them use the software effectively and confidently while remaining compliant with HMRC regulations.
As well as helping you choose and set up your software, we provide ongoing support to make digital tax as simple as possible. We can register you for MTD, answer any questions you have, and check your submissions before they are sent to HMRC to help avoid mistakes. If you would rather spend your time focusing on your business, we can also take care of your bookkeeping and MTD submissions for you. Our aim is to make sure you stay compliant with HMRC requirements while reducing the time and stress involved in managing your tax records.
How to Get Started with Making Tax Digital Today
Getting started with Making Tax Digital does not have to be complicated. First, check whether MTD applies to you or your business and understand what records you will need to keep digitally. If you are required to comply, the next step is to register with HMRC and choose MTD-compatible accounting software that meets your needs. Once your software is in place, you should begin recording your income, expenses, and invoices electronically to ensure your records are accurate and up to date.
At 360 Chartered Accountants, we have helped businesses make the transition to digital accounting with confidence. For expert support and guidance on accounting software, bookkeeping, and registering for MTD, get in touch with us now. Businesses trust us to provide reliable support for their accounting and tax needs.
