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Making Tax Digital For Self Employed and Landlords

You’ve likely heard the rumblings and rumours about Making Tax Digital for Income Tax Self Assessment (MTDITSA) being on the way. We purposely haven’t said too much about it up to this point.

Mostly because HMRC keep changing their minds about exactly when it will begin, so why worry you when we don’t have a start date?! But with the way things currently stand, 6th April 2026 is go time. 

The summary of the grand plans are to streamline tax admin by moving tax online. Making everyone join the modern age by using accounting software to submit all taxes, with the goal to make the process more efficient, user friendly, and eventually paperless.

What does it mean in practice?

Five tax returns per year – whilst this may sound daunting (and probably like your worst nightmare), filing your tax returns in five smaller, more manageable chunks will undoubtedly relieve a lot of stress. By breaking down the process into quarterly updates, plus a final year-end declaration, you will be able to monitor your tax throughout the year and minimise the risk of making any mistakes.

Digital records of all your transactions – this is fundamental to complying with MTD as these transactions will form the basis of your quarterly updates. 
Pay as you go – as usual, your tax liability must be paid by January 31st. However, with the introduction of the new quarterly system, you also have the option to pay your taxes as you go. 

£10,000 threshold for sole traders – anyone who is self-employed or earns over £10,000 as a landlord will also have to follow MTD regulations.

What should I do now? 

The most integral part of all this is software. You’re going to need accounting software. 
I am going to be very straight forward here and recommend you DO NOT use the Quickbooks self employed offering. Its just not good. I don’t know how else to say it. 

Xero is great, but at £26+VAT a month its a bit pricey. I am waiting to see if they offer a better package to cater for MTDITSA. 
Freeagent is free with some things and does a good job, but otherwise its about £20+VAT.

The best thing I’ve seen so far to help the self employed through MTD is an app from Coconut. Its all on your phone, you can raise invoices on it, do your bank reconciliations etc. 
If you hate tech, don’t do laptops, want to run things from your phone that’s the direction I’ll be pointing you in for now. Plus its about £5+VAT a month so its affordable. 

There are 101 other options available, but these are the key ones I am coming across. If I hear of better ones I will provide updates, but as its all new software is being released as we get nearer so we don’t have all the options yet.

The sooner you can get yourself onto software the better. Get used to it. Get used to snapping those receipts and working with the software to make it work for you. 
Also speak to me before signing up to anything, because we can usually get you discounts. 

I know you’re all terribly excited to get to deal with me five times a year instead of one, so maybe focus on that treat instead of the headache I may have just given you. 

If the whole thing feels overwhelming, book yourself into my diary for a chat and I’ll see how I can help.

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