If there’s one thing business owners could do without, it’s more red tape.
Unfortunately, there’s a big chunk of it on the horizon in the shape of Making Tax Digital (MTD).
Government plans for the new regime are marching on, and if you’re not already prepared, now’s the time to get your house in order.
The big change affects anyone earning over £50,000 from self-employment or property rental.
From April 2026, they will need to keep digital records and submit quarterly updates to HMRC, rather than doing one tax return a year.
For many, that’s a major shift – especially for those who still favour the shoebox-under-the-bed approach to receipts.
Why fix something that isn’t broken? Well, HMRC’s goal is to reduce errors and close the tax gap. Whether we agree with it or not, MTD is coming – and fighting it will not stop it.
The good news? If you take a few simple steps now, the transition does not have to be painful. In fact, it could actually help your business run more efficiently.
Here are five things senior accountant, Victoria Thompson, from JF Hornby & Co recommends every self-employed person and landlord start doing now:
- Know your timeline
MTD for Income Tax Self-Assessment (ITSA) starts in April 2026 for those earning over £50,000, and in April 2027 for those earning over £30,000. If you fall into either group, mark it on your calendar – now. - Move to digital record-keeping
If you’re still using paper records or spreadsheets, it’s time to switch to accounting software. Packages like Xero, QuickBooks or Sage are HMRC-compliant and can handle everything from invoices to bank reconciliations. Many of them offer free trials – so give a few a whirl to find the one that best fits with you. - Keep records in real time
Get into the habit of recording income and expenses as they happen – not three months down the line. It’ll save you stress, give you a clearer picture of your cashflow, and make quarterly reporting a breeze. - Speak to your accountant sooner, not later
Don’t wait until the last minute to ask for help. Your accountant can advise on software, show you how to use it, and flag anything you might be missing. The earlier you start the conversation, the smoother the process will be. - Don’t panic – but don’t ignore it either
This isn’t the end of the world. Yes, it’s a change – but with the right support, it’s entirely manageable. The key is not burying your head in the sand.
At JF Hornby & Co, we’re already helping clients get ready – and we’ll be there every step of the way as MTD rolls out. If you really can’t face the prospect of quarterly returns and prefer that work to be completed for you, we’re here to help.
Need help preparing for Making Tax Digital? Call us on 01229 588077 or email jfh@jfhornby.com.
