Making Tax Digital (MTD) is one of the biggest changes HMRC has introduced for self-employed individuals and landlords in the UK. You may have heard people say “you’ll need to report every three months instead of once a year” — and for many, that sounds overwhelming.

But MTD doesn’t have to be confusing. Once you understand what’s changing, who it affects and how to prepare, you’ll feel much more confident and in control.

What Is Making Tax Digital (MTD)?

Making Tax Digital is HMRC’s long-term plan to modernise the UK tax system by moving away from paper returns and annual submissions.
Instead of filing one Self-Assessment tax return per year, you will send:

  • Quarterly updates of your income and expenses

  • An end-of-period statement

  • A final declaration to confirm your tax position

Think of it as doing smaller, more frequent mini tax returns rather than one large one at the end of the year.
You’re still self-employed. You still pay income tax. The change is simply how you report to HMRC.

Who Will MTD Affect?

MTD for Income Tax will apply to:

  • Self-employed individuals (sole traders)

  • Landlords with property income

…once their income exceeds the MTD threshold set by HMRC.

This includes people such as:

  • Builders, electricians, plumbers

  • Hairdressers, cleaners, beauty therapists

  • Drivers, couriers, delivery professionals

  • Anyone earning self-employed income

  • Landlords renting out residential property

If this sounds like you, MTD will likely apply in the near future.

What Does “Reporting Every Three Months” Actually Mean?

A common misconception is that you’ll need to pay tax every three months.
This isn’t true. You will only be reporting, not making quarterly payments (unless you choose to).

Quarterly reporting means:

  • Logging income and expenses regularly

  • Sending a digital update every three months

  • Submitting a final declaration at the end of the year

MTD is essentially a “little-and-often” approach to tax reporting.

Will MTD Make Life Harder?

It can feel daunting at first — especially if you currently do your books once a year.
But with the right systems in place, MTD can actually make running your business easier.

Quarterly bookkeeping helps you:

  • Stay organised and avoid last-minute stress

  • See how your business is performing throughout the year

  • Plan ahead for tax bills

  • Spot missing receipts or mistakes early

Consistency is the key.
Weekly or monthly bookkeeping makes quarterly submissions simple.

What Software Will I Need for MTD?

HMRC requires you to use either:

  • MTD-compatible bookkeeping software, or

  • A bridging tool that allows spreadsheets to connect digitally to HMRC

This doesn’t mean you need to be technical.
Your records simply need to be digital and capable of sending information electronically.

Suitable options include:

  • Simple bookkeeping software

  • A spreadsheet linked to a bridging tool

  • A system set up for you by your accountant

The goal is to make everything easier — not more complicated.

MTD for CIS Subcontractors & Trades

If you’re a CIS subcontractor, your reporting stays broadly the same — you’ll still declare:

  • Income received

  • CIS deductions

  • Business expenses

The difference is in how often you submit the information.

To keep things smooth under MTD:

  • Record CIS statements regularly

  • Keep receipts organised

  • Avoid storing paperwork in bags, boxes or glove compartments

  • Keep all records in one place

Good routines now mean an easier transition later.

What Should I Be Doing to Prepare for MTD?

Even if MTD doesn’t apply to you yet, preparing early will save you stress later.
Here’s what you can do now:

1. Start keeping records regularly

Weekly or monthly bookkeeping is far easier than once-a-year panic.

2. Use one system for all income and expenses

Whether it’s a spreadsheet, an app or software, consistency matters.

3. Organise receipts, invoices and CIS statements

Paper or digital is fine — as long as it’s organised.

4. Ask for support if you’re already behind

It’s much easier to move into quarterly reporting from a tidy, up-to-date starting point.

Struggling With Yearly Tax Returns Already?

If one tax return a year feels stressful, you’re probably wondering how you’ll cope with four updates.

This is where professional support makes all the difference.

I can help you:

  • Set up a simple, user-friendly bookkeeping system

  • Keep your records organised throughout the year

  • Handle quarterly updates and the final declaration

  • Understand MTD in clear, plain English — not tax jargon

No judgement — just support, structure and peace of mind.

How I Can Help You With MTD

When MTD becomes mandatory for your situation, you won’t be left to figure it out alone.
I offer support with:

  • Checking whether MTD applies to you

  • Setting up bookkeeping that suits your business

  • Choosing the right software or spreadsheet system

  • Submitting quarterly updates on your behalf

  • Ensuring you claim every allowable expense

A smoother MTD experience starts with the right guidance.

Feeling Unsure About MTD?

Most self-employed people I speak to feel uncertain about MTD — and that’s completely normal.
You don’t need to know everything. You just need to know who to ask.

If you’d like help preparing for quarterly reporting or understanding how MTD affects you personally, get in touch and I’ll guide you through each step.

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