MTD Made Simple: What It Means for You and How to Get Ready
Take a Breath: You're Not Behind
Navigating tax changes can feel daunting—especially when deadlines seem distant, but the admin feels relentless. It’s completely normal to feel unsure when facing a new system. If the phrase "Making Tax Digital" makes your shoulders tense, let’s take a breath. You’re not behind—you’re right on time to get ahead, with clarity and calm.
What is Making Tax Digital (MTD)?
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is part of HMRC’s wider plan to modernise the UK tax system. It means you’ll need to keep digital records and use approved software to submit tax updates throughout the year—replacing the single Self Assessment return.
Instead of one annual tax return, you’ll:
Keep records digitally
Submit quarterly updates through compatible software
File an End of Period Statement (EOPS) and a Final Declaration at year-end
It’s not about paying tax more frequently—it’s about managing it more clearly and calmly.
Who Does It Affect—and When?
From April 2026: Self-employed individuals and landlords with income over £50,000
From April 2027: Those with income between £30,000 and £50,000
Under £30,000: You’re not required to comply yet, but you can opt in early
The income thresholds are based on your total gross income—before any expenses—from all self-employment and property business activities combined. HMRC will assess your eligibility based on the tax year two years before MTD becomes mandatory for you. For example, if MTD applies to you from April 2026, your income from the 2024–25 tax year will determine whether you meet the threshold.
Why Preparing Early Makes Life Easier
This isn’t something to panic over—it’s something to prepare for. The earlier you start setting up your digital systems, the more confident and in control you’ll feel. Think of it as building a new habit: gentle, steady, and supportive.
First Steps: What You Can Do Now
Check your income threshold. Look at your gross income from self-employment and/or property from two years ago. If it’s over £50,000, MTD applies to you from April 2026.
Start recording digitally. Even if you’re using spreadsheets, start transitioning now. MTD-compatible software like Xero, FreeAgent, QuickBooks, or Sage will streamline your records and reporting. If you’re not ready to switch, you can use bridging software as a temporary step.
Get comfortable with the quarterly rhythm. MTD means submitting summaries of income and expenses every three months. You’ll then submit your EOPS and Final Declaration at year-end—replacing your old Self Assessment.
Schedule a monthly check-in. Create a routine to upload receipts, reconcile transactions, and check your numbers. These ‘money dates’ reduce year-end pressure and give you peace of mind throughout the year.
Ask for support. You don’t have to figure this out alone. Whether it’s software setup, submission services, or full digital bookkeeping, our team at Serenity Accounting Services can guide you every step of the way.
MTD is About More Than Compliance—It's About Clarity
This isn’t just a tax change—it’s a mindset shift. MTD is your opportunity to replace last-minute chaos with calm structure. When your records are up-to-date and digital, you make better decisions, reduce stress, and stay ahead.
Your Gentle MTD Prep Timeline
Now: Learn the basics and check if MTD applies to you
1–3 months: Explore software options and test workflows
6–12 months ahead: Start tracking your income and expenses digitally
From your start date: Submit quarterly updates with clarity and confidence
Take the Next Step with Support
If you’re unsure what steps to take next, now is the perfect time to reach out to a trusted bookkeeper or accountant—or book in time with me directly to go over your current systems, answer your questions, and map out a calm plan for MTD readiness together.. Getting personalised support can make all the difference in setting up systems that feel calm, clear, and completely manageable.