Making Tax Digital for Income Tax currently applies to self-employed individuals and landlords with qualifying income above the current threshold. From April 2026, this applies to taxpayers with annual gross income of more than £50,000 from self-employment and/or property, with the threshold reducing to £30,000 from April 2027.  The scope of the regime will expand over the coming years, meaning many more taxpayers will eventually need to comply. 

Stephen says one of the biggest issues advisers are encountering is uncertainty. 

“We’re finding that many people simply aren’t sure whether they’re affected or what they need to do next. Before anything else, it’s important to establish whether Making Tax Digital applies to your circumstances and, if it does, understand what your obligations are.” 

One of the biggest changes under Making Tax Digital is the requirement to keep digital records and submit information to HMRC using compatible software. 

For those who have traditionally relied on spreadsheets, paper records or gathering information at the end of the tax year, this may require a change in approach. 

“Making Tax Digital isn’t just about submitting information electronically. It’s about maintaining accurate financial records throughout the year. Good record keeping has always been important, but now it becomes an ongoing process rather than an annual task.” 

It’s important to note that if you’re working with an authorised agency who is making submissions on your behalf, you may not need to purchase new software. In those cases, your adviser will use HMRC-recognised bridging or MTD-compatible software to maintain the required digital records and submit updates on your behalf. 

If you haven’t already selected software, now is the time to do so. 

There are a range of HMRC-recognised software providers available, but the right solution will depend on the size and complexity of your affairs. Where an authorised agent is handling your MTD obligations, it is worth discussing whether additional software is required or whether your existing record-keeping methods can continue as part of the overall process.   

Rather than choosing software based solely on cost, Stephen recommends considering how it fits with your wider financial processes. 

“The right software should make life easier, not more complicated. It’s worth taking a little time to choose a solution that suits the way you work and supports accurate record keeping throughout the year.” 

One of the most common mistakes is assuming the transition can be completed in a matter of days. 

Setting up software, learning new processes and ensuring records are complete all take time. Leaving preparations until the last minute increases the likelihood of errors and unnecessary pressure. 

“Every year we see people rushing to meet tax deadlines. Making Tax Digital is no different. Starting now gives you the opportunity to resolve any issues before they become urgent.”

Although the focus is understandably on compliance, Making Tax Digital also presents an opportunity to strengthen financial management. 

Keeping records up to date throughout the year provides better visibility of business performance, cash flow and profitability, enabling more informed decision-making. 

“Many clients who’ve embraced digital record keeping tell us they have a much better understanding of how their business is performing because they’re reviewing their finances regularly rather than only once a year. That’s a benefit that extends well beyond tax compliance.”

Every business and property portfolio is different, and the practical application of the rules will vary depending on individual circumstances. 

Whether you’re unsure if the rules apply, need help choosing software or want confidence that your records are compliant, professional advice can help avoid costly mistakes. 

“The conversations we’re having with clients aren’t just about the legislation,” says Stephen. “They’re about finding practical solutions that fit their business and giving them confidence that they’re doing the right thing.”

With the first submission deadline almost here, businesses and individuals who have yet to prepare should make this their immediate focus. 

Taking action now will help avoid unnecessary stress, reduce the risk of errors and put you in a stronger position for future reporting periods. 

Making Tax Digital is about more than meeting a deadline. It’s an opportunity to modernise your financial processes and build greater confidence in your tax affairs. 

Whether you need help understanding your obligations, selecting the right software or preparing your business for the new reporting requirements, Old Mill’s tax specialists can provide practical, tailored advice. 

If you’re unsure where to start or want reassurance that you’re ready, speak to your usual Old Mill adviser or contact Stephn Martin today.