Making Tax Digital: What You Need to Know
- Giraffe Accountants
- Jun 17
- 4 min read
We’ve noticed a real uptick in queries about Making Tax Digital recently—especially from landlords, self-employed individuals, and small business owners.
And no wonder—there are some big changes coming that could catch people out if they’re not ready. So, here’s what you need to know (and what to do) to stay ahead of the game.
Following on from our last blog post we thought it was time for another post!
What is Making Tax Digital (MTD)?
Let’s start with the basics....
Making Tax Digital is HMRC’s initiative to move tax filing online. Rather than doing one big tax return at the end of the year, you’ll submit quarterly updates using approved software. You’ll also need to keep digital records—no more paper shoeboxes!
It’s all designed to reduce errors, streamline the tax process, and make everything more transparent.
Why Are We Getting More Queries About MTD?
It’s simple—2026 is a milestone year for MTD.
Although Making Tax Digital for VAT has been around for a while, MTD for Income Tax Self Assessment (ITSA) will apply to many more people starting next April. That includes landlords and the self-employed with income over £50,000. That’s why the phones have been ringing more than ever!
What’s Changing in 2025?
Let’s break it down.
Who Needs to Comply?
Self-employed individuals with income over £50,000 (lowering to £30,000 in 2027).
Landlords earning more than £50,000.
Partnerships (to be included in future phases).
If you are both self-employed and a landlord the joint threshold is £50,000!
Important Deadlines
April 2026 – MTD ITSA becomes mandatory for individuals earning over £50,000.
April 2027 – The threshold lowers to £30,000.
Future rollout – HMRC plans to extend MTD ITSA to more taxpayers over time.
New Thresholds and Reporting Rules
You’ll need to:
Keep digital records
Submit quarterly updates to HMRC
Send a final year-end declaration
It’s more work, but also an opportunity to get on top of your finances more regularly.
What If You’re Not Ready?
Common Challenges for Individuals and Landlords
If you’re used to spreadsheets or paper records, switching to digital can feel daunting.
Many landlords, for instance, still rely on handwritten ledgers. And small businesses often don’t have the time or tools to manage quarterly submissions.
Support for Sole Traders and Small Businesses
You’re not alone. At Giraffe Accountants, we’ve helped many clients make the digital leap. With the right tools and guidance, the transition doesn’t need to be a headache.
We can walk you through setup, training, and ongoing submissions—tailored to your needs.
How to Prepare for Making Tax Digital 2025
Software You’ll Need
You must use HMRC-approved software. Options include:
Xero
QuickBooks
FreeAgent
Sage
We can help you choose the right one and even handle it for you.
Switching from Paper to Digital Records
This is probably the biggest shift for most people. But it doesn’t have to be painful. Start small—scan receipts, use mobile apps for expenses, and move to cloud accounting.
Setting Up Your HMRC Digital Tax Account
You’ll need to:
Create a Government Gateway ID (if you haven’t already)
Link your software to HMRC’s portal
Authorise your accountant (us!) to act on your behalf
How Giraffe Accountants Can Help
Our Experience with MTD Transitions
We’ve been helping clients comply with MTD since the VAT rollout. We know the pitfalls and how to avoid them.
Bespoke Support for Landlords, Self-Employed & SMEs
We understand that no two clients are alike. Whether you're managing a portfolio of rental properties or freelancing full-time, our team has your back.
Don’t Get Caught Out – Act Now
The earlier you get ready for MTD, the better. If you leave it until the last minute, you risk:
Penalties for non-compliance
Missing deadlines
Stressful last-minute tech setups
Let’s make it easy instead. We’ll get you set up and running now—long before the panic sets in.
Summary
Making Tax Digital 2026 is coming fast, and it’s going to affect more people than ever—especially landlords and the self-employed.
By planning ahead, choosing the right software, and getting support from your friendly neighbourhood accountants (that’s us!), you can make the switch without breaking a sweat.
FAQs
Do I have to register for MTD if I’m under the threshold?
Not yet, but there are a number of benefits to keeping your records digitally. We would be delighted to have a chat to show you why!
Can I use spreadsheets for MTD?
Yes—but only if they’re linked to bridging software that submits data to HMRC digitally.
What if I miss a filing deadline?
HMRC plans to use a points-based penalty system, so repeat offences will lead to fines. Best to stay on top of deadlines.
What software does HMRC approve?
Options include Xero, QuickBooks, Sage, FreeAgent, and more. Check HMRC’s official list.
When should I register for MTD ITSA?
Start preparing now and move to compatible software ready for the change.
Get In Touch With Giraffe Accountants
If you’re unsure about Making Tax Digital or want help with the setup, training, or submissions, we’re here for you.
📞 Let’s chat: www.giraffeaccountants.co.ukWe’re always happy to talk tax—with no jargon and no pressure.
