Under MTD, you will need to:
This is in addition to your self-assessment tax return filling which will still be due annually.
We understand that keeping up with digital tax reporting can be daunting. That’s why we’ve developed structured support packages to guide you through every step of Making Tax Digital — from setup to quarterly compliance and software support.
Each package is designed to give you the right level of support, depending on how hands-on you want to be and how much of the compliance process you want us to manage on your behalf.
We offer two levels of Making Tax Digital support depending on how much involvement you would like to have in the day-to-day record keeping and compliance process.
All packages are offered on a monthly subscription basis with prices from the figures shown below. Final fees are confirmed after a short review of your records and business size.
| Service | Starter | Essential |
|---|---|---|
| Registration with HMRC’s new One Login | ✔ | ✔ |
| Set-up of online accounting software (e.g. Xero) and link to HMRC | — | ✔ |
| Automatic bank feeds set up | — | ✔ |
| Monthly bookkeeping & bank reconciliations | — | ✔ |
| Review and submission of quarterly MTD updates to HMRC | ✔ | ✔ |
Prices from £55 per month
Designed for clients who are not yet using accounting software and currently keep manual or basic records.
Best for: Sole traders and landlords with simple affairs who want an affordable route into MTD and are happy to manage their own bookkeeping.
Prices from £95 per month
Ideal for clients who want cloud accounting software with full professional bookkeeping support.
Best for: Growing businesses that want hands-off bookkeeping with expert oversight and full MTD compliance.
HMRC encourages early setup and voluntary sign-up ahead of requirements so you are ready and avoid future compliance issues.
Do quarterly updates mean I’ll pay tax four times a year?
No.
Quarterly updates are for reporting purposes only. You will still pay tax under the current Self Assessment system unless HMRC introduce changes in the future.
However, submitting updates regularly can help you budget for your tax bill throughout the year rather than facing one large payment.
Will Making Tax Digital replace my Self Assessment tax return?
No.
You will still need to submit a final year-end declaration (similar to your current Self Assessment tax return).
Under MTD, you will submit:
Who needs to comply with Making Tax Digital for Income Tax?
From April 2026, MTD will apply to:
With qualifying income over £50,000.
This threshold is expected to reduce in future years.
What counts as qualifying income?
Qualifying income includes:
It is based on your gross income (before expenses), not profit.
Do I need to use accounting software?
Yes. If you are handling things yourself.
MTD requires digital record keeping and submissions through HMRC-recognised software. Spreadsheets alone will not be sufficient unless they are linked to compatible bridging software (which we have 😊)
What happens if I stop being self-employed but still have other income?
If you cease one source of income (such as self-employment) but continue to receive other qualifying income (such as rental income), you will still be required to comply with MTD.
HMRC assess your total qualifying income, not each source separately.
This means you will still need to:
You will only be able to leave MTD once your total qualifying income falls below the relevant threshold and HMRC confirm you can deregister.
What if I stop all sources of income?
If all qualifying income sources stop completely, you will not be required to comply with MTD.
You will still need to submit your final Self Assessment tax return and notify HMRC of the cessation.
What if my income falls below the threshold?
If your qualifying income falls below the threshold (currently £50,000, reducing in future), you may be able to leave MTD.
However, HMRC may require you to remain within MTD for a minimum period before deregistration is allowed.
Do I need to register for MTD myself?
In most cases, HMRC will identify affected taxpayers and notify them directly.
We will guide you through the registration process and ensure you are compliant at the appropriate time.
What happens if I don’t comply?
HMRC will introduce a new points-based penalty system for late submissions and payments under MTD.
Keeping accurate digital records and submitting updates on time will be essential to avoid penalties
© 2024 Harrison Hinchliffe. Glossop Manchester