Small businesses will soon be required to keep digital records and send HMRC quarterly updates. Johnston Smillie can help you get ready for the change.

Making Tax Digital (MTD) for Income Tax is a UK government initiative aimed at modernising the tax system.

From 6 April 2026, taxpayers meeting certain criteria will be required to maintain digital records and submit income tax updates to HMRC quarterly, replacing the traditional annual Self Assessment tax return.

MTD for Income Tax will apply:-

Under MTD for Income Tax, affected taxpayers will need to:

• Maintain Digital Records: Keep digital records of all business and rental income and expenses using compatible software.​

• Quarterly Submissions: Submit updates to HMRC every three months, providing an overview of income and expenditure.​

• End-of-Period Statement: At the end of the tax year, finalise your tax affairs and submit any necessary adjustments.​

We have extensive experience in guiding clients through tax system changes, including the initial MTD for VAT implementation. Our team can:​

• Assess Your Readiness: Evaluate your current record-keeping systems and determine any necessary changes.​

• Recommend Suitable Software: Advise on HMRC-compliant digital accounting software tailored to your needs.​

• Provide Training and Support: Offer training sessions to ensure you  are comfortable with the compatible software.​

• Ongoing Compliance Assistance: Assist with quarterly submissions and end-of-year processes to ensure full compliance.​

While the mandatory start date is April 2026, early preparation is key. Transitioning to digital record-keeping can take time, and early adoption allows for a smoother shift. Additionally, familiarising yourself with the new system ahead of time can help identify and address any challenges proactively.​

As with any new government initiative, we are fully expecting a whole host of teething problems. That’s why we have our fingers firmly on the pulse of Making Tax Digital for Income Tax so that we can advise you what you need to do.

You can get on with doing what you do best – running your business and looking after your rental properties – and our friendly team of experts will make sure you know what you need to know, when you need to know it.

With this major change to the UK tax system on the horizon, it’s a good idea to plan ahead.

We’ll help you do just that, sitting down together in our offices, or yours, to discuss how Making Tax Digital for Income Tax will impact you.

We will recommend, in plain English, ways to improve your internal record keeping and overall approach to tax as you prepare to change from yearly to quarterly returns.

Contact us today to find out how we can help get ready for Making Tax Digital for Income Tax.