Making Tax Digital: Why “Later” is Suddenly Right Around the Corner
If you file a tax return, you’ve probably heard murmurings about Making Tax Digital for Income Tax (MTD for IT). This will affect income made from sole-trading activities and property (so for income from employment or pensions, where you pay tax via PAYE, this phase of MTD won’t affect you). It’s the biggest shake-up to Self-Assessment in 25-years and, like it or not, it’s mandatory. Miss a deadline and HMRC’s new penalty regime will be ready and waiting.
The good news? With a little forward planning, and the right compliant software, you can move smoothly through the change. And the even better news? You don’t have to figure it out alone – that’s what we’re here for.
What actually changes?
- Quarterly reporting: Instead of one return a year, you’ll send HMRC a summary of income and costs every three months, plus a year-end finalisation
- Approved software only: Paper records and ad-hoc spreadsheets won’t cut it unless they’re linked to HMRC through “bridging” tools
- Same tax dates: You’ll still be submitting a full tax return and paying any tax due on 31st January (and 31st July if you make payments on account). MTD simply adds more touchpoints in between.
HMRC’s big pitch is fewer errors, better visibility, and a fully digital tax system. We shall wait to see whether or not the theory matches real life, but regardless, the deadlines are set.
When does it hit you?
| Annual income from self-employment or property | MTD start date |
| Over £50,000 (based on your 2024/25 return) | 6 April 2026 |
| Between £30,000 and £50,000 | 6 April 2027 |
| Below £30,000 or other income types | Earliest 2028 (HMRC still deciding) |
Those thresholds are dependent on the tax return you file by 31st January 2026 (for 2024/25). So, the figures you’re pulling together right now will lock in your MTD start line.
Five practical steps to get MTD for IT ready
Step 1: Check where you stand – today
Pull out the 2023/24 tax return you submitted in January 2025. Does your combined sole-trade and rental income brush up against £50k? If it’s close, take extra care finalising your 2024/25 figures – your turnover band decides whether you start in 2026 or 2027.
Shortcut: Our team is on standby to help prepare your 2024/25 return early. You’ll know your exact turnover months before HMRC, and we can plan accordingly.
Step 2: Pick compliant software that fits your business
If you already use compliant software like Xero, QuickBooks or FreeAgent for MTD VAT, you’re half-way there – if you’re not, we have you covered. At Grant-Jones we have several compliant software solutions for our clients to choose from, and, if you’re still on spreadsheets, don’t panic – we can connect a bridging tool or migrate you to cloud accounts that suit your workflow (and budget).
Tip: Choose your quarterly cycle wisely. You can align updates to natural business lulls rather than your busiest sales months.
Step 3: Start using the software now
Nothing reveals a process hiccup faster than real transactions. Upload a month’s sales, snap receipts on your phone, reconcile the bank feed. Submissions won’t be switched on until your MTD start date so it’s better to iron out the kinks in 2025 than scramble in 2026 with HMRC watching the clock. We can set the software up for you and train you how to use it.
Do you prefer to stay hands-off? You can hand your bookkeeping to us and then relax with peace of mind that everything is being taken care of for you.
Step 4: Think (and work) quarterly
Even if you won’t report until 2026/27, practise bringing all your records up to date every three months. You’ll spot missing invoices sooner, understand seasonal swings, and the first official MTD submission will feel routine, not daunting.
Step 5: Book quarterly catch-ups with your accountant
MTD’s extra reporting points aren’t just admin; they’re built-in review dates. Use them to tweak pricing, trim costs or plan tax-efficient investments during the year, not after it’s too late.
What if you do nothing?
HMRC’s new penalty model hits instantly: miss a quarterly deadline and you accrue points; rack up too many and a £200 fine lands – every time! Persistent lateness also triggers interest on unpaid tax plus potential enquiries. Basically, avoidance will cost you more than preparation.
How Grant-Jones can make the switch painless
- Early diagnostics: We’ll confirm your threshold status and optimal quarter ends
- Software sorted: We work with you to choose and set up the right software for your business and MTD, migrate data, and train you how to use it (or run it for you)
- Quarterly reviews: We’ll compile each update, check the numbers, and file on time
- Year-end wrap-up: One final reconciliation and your Self-Assessment is done, with no January panic (a blessing for all of us!)
Our clients tell us the real benefit isn’t just compliance; it’s clarity. Live figures mean better decisions and fewer surprises, long before HMRC gets involved.
If you’re ready to get ahead of Making Tax Digital get in touch and speak with one of the team – a short chat now beats a frantic scramble in 2026.
