🍦Making Tax Digital: Are You Ready?

Hey friend —

If you’re a small business owner or entrepreneur in the UK, you’ve likely heard about Making Tax Digital (MTD)—but what does it actually mean for you? More importantly, are you ready to stay compliant with HMRC’s requirements?

What is Making Tax Digital?

MTD is HMRC’s initiative to move tax reporting online, aiming to make tax administration more efficient, accurate, and easier for businesses. The days of paper records and last-minute tax return scrambles are fading fast. Instead, businesses need to keep digital records and submit their tax information using compatible software.

Who Does It Apply To?

Currently, MTD applies to:

✅ All VAT-registered businesses (regardless of turnover). You should already be keeping digital records and submitting VAT returns via MTD-compatible software. This is currently in place right now.

🔜 Sole traders and landlords with an income over £50,000 – From April 2026, you’ll need to follow MTD for Income Tax Self Assessment (MTD for ITSA).

🔜 Sole traders and landlords with an income over £30,000 – Your turn comes in April 2027.

(We’re still waiting on an MTD rollout for Corporation Tax—watch this space!)

How to Stay Compliant

💻 Use MTD-Compatible Software
Spreadsheets alone won’t cut it anymore. You’ll need software like Xero, QuickBooks, or FreeAgent to keep records and submit returns directly to HMRC. Many are easy to use and automate much of the process for you.

📅 Stay on Top of Deadlines
With MTD for ITSA; quarterly reporting will be required, meaning more frequent updates than the old self-assessment system. Good bookkeeping habits will help you avoid last-minute stress.

📚 Keep Digital Records
Your invoices, expenses, and income details must be stored in a digital format—whether that’s in cloud software or a linked spreadsheet. No more shoeboxes full of receipts!

🛠 Get Support If You Need It
Not sure if you’re compliant? An accountant (like us at Cone Accounting!) can help you set up the right software, keep things running smoothly, and make tax time stress-free.

Final Thoughts

MTD isn’t just another box-ticking exercise—it’s a chance to simplify your tax process, reduce errors, and free up time for what really matters: growing your business.

If you’re unsure whether you’re MTD-ready, now’s the time to check. Need guidance? We’re here to help!

Need help managing the numbers so you can focus on what matters most? At Cone Accounting, we’re here to support your journey. Let’s make 2025 your best year yet.

Written and edited by Ben Nacca