Making Tax Digital.

Stay ahead of HMRC deadlines with our Making Tax Digital accountancy services - efficient, accurate, and tailored to your business needs.

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Our Services

Take the stress out of tax compliance - our Making Tax Digital experts guide your business through every step of digital tax reporting.

What is Making Tax Digital (MTD)?

Making Tax Digital is a government initiative to modernise the UK tax system, with the aim of making it easier for individuals and businesses to get their tax right and manage their affairs more efficiently.

Making Tax Digital for Income Tax

Making Tax Digital for Income Tax (MTD for Income Tax) introduces a new method for sole traders, the self-employed and landlords to report their income and expenses digitally.
With the new system, sole traders and landlords will use approved software to:
- keep digital records of their income and expenses,
- send updates to HMRC every three months, and
- file a final end of year submission and pay any tax owed by 31 January next year.

MTD for Income Tax will apply from:

April 2026 for self-employed individuals and landlords with income over £50,000.
April 2027 for those with income over £30,000.

Sole traders, the self-employed and landlords can voluntarily sign up for MTD for Income Tax ahead of the deadlines.
If you are already using cloud accounting, the impact of MTD will be minimal, as many cloud solutions such as Xero software are MTD compliant.
If you are unsure whether your current software is MTD-compatible or still use manual records, the Armstrongs team is here to assist.

Even though MTD may not apply to you right now, our advice is to plan ahead. Our team is here to help you go digital.

Making Tax Digital for VAT

All VAT-registered businesses are required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns.
VAT registered businesses are no longer be able to use their existing VAT online account to submit their VAT returns.

Making Tax Digital Frequently Asked Questions (FAQ’s)

Who does Making Tax Digital apply to?

Making Tax Digital for VAT has applied to all VAT registered businesses since April 2022.

Making Tax Digital for Income Tax will apply to sole traders, the self-employed and landlords from April 2026 for those with income over £50,000.

Is MTD mandatory for my business?

Yes - MTD for VAT is mandatory for all VAT-registered businesses.

Can I opt out of MTD?

You can seek an exemption from HMRC due to circumstances like age, disability, remote locations or religious beliefs. Exemptions must be approved by HMRC and are only granted in exceptional cases.

Do I need special software for MTD?

Yes - you must use MTD compatible software, such as Xero, QuickBooks, Sage or FreeAgent. Spreadsheets can still be used, but only with bridging software to submit data to HMRC. Armstrongs can assist with submitting data via bridging software.

What software can I use for MTD?

MTD compatible software includes Xero, Quickbooks, Sage and FreeAgent.

Can I still use spreadsheets?

Spreadsheets can still be used, but only with bridging software to submit data to HMRC. Spreadsheets alone aren’t MTD compatible.

Do I need to change how I keep records?

Yes - MTD requires you to keep digital records.

Do I need to register for MTD?

Yes, all sole traders, the self-employed and landlords with income over £50,000 will need to sign up to MTD for Income Tax by 6th April 2026.

What are the penalties for non-compliance?

HMRC may fine you £400 if you don’t have compatible software in place. Additionally, HMRC uses a points-based penalty system for late filings. Reaching a threshold triggers a £200 fine.

When will I need to send quarterly updates for MTD for IT?

You need to send your update within one month of the period end date. Updates are cumulative over the tax year, so you can correct errors or adjust previous submissions in your next update.

1st Quarterly update: Period covered: 6th April to 5th July Filing deadline: 7th August.

2nd Quarterly update: Period covered: 6th July to 5th October Filing deadline: 7th November.

3rd Quarterly update: Period covered: 6th October to 5th January Filing deadline: 7th February.

4th Quarterly update: Period covered: 6th January to 5th April Filing deadline: 7th May.

If your accounting period doesn’t align with the tax year, you can use calendar period update periods, instead of using the standard quarter update periods.

Do I still need to do a tax return?

Once you’ve submitted the fourth and final quarterly update, you’ll still need to file an end-of-year submission for each tax year, due by the usual Self-Assessment deadline of 31 January following that tax year.

Get in touch

Sarah Van Ristell

Email Sarah

024 7671 5111

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When it comes to my business, no question is ever too small or big for them - someone is always on-hand to help. If you need an accountant, wherever you are in your business journey, Armstrongs are the team for you."

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“Armstrongs have demonstrated exceptional professionalism, attention to detail, and in-depth knowledge of the HMRC tax regime.

Paul's ability to clearly explain complex tax regulations in a way that makes the process feel approachable and transparent is invaluable. Communication has always been prompt and thorough at every stage, ensuring I always felt informed and confident in the decisions I was making.

I highly recommend Armstrongs to anyone seeking accountancy and taxation advice.”

Cormac Glynn, Everglynn Law

“I have been repeatedly impressed by Armstrongs' first rate, well considered tax planning advice, particular thanks go out to Paul Farmer and Adam Dunne. This high level of service is also demonstrated by their Wealth Management team. For a wide base of expertise, spanning business and private advice, Armstrongs are impressive.”

Simon Steel

“Armstrongs have been our accountants for 5+ years now and we have been very happy with the service we have received; we are a small business based in Leicester and we feel we get treated just as well as larger companies would. Armstrong's are always happy to help us however small our queries are, and we find their charges to be fair.

We would highly recommend them to anyone looking for accountancy services.”

Samantha Leigh, Leicester Office Furnishers Limited

“We have used Armstrongs as our accountants now for number of years here at 1st 4 Fire and Security Limited and cannot fault them. The service they provide along with the responsiveness of any queries and emails we have is second to none. Sarah and the team do a brilliant job, and we look forward to many more years of working together.”

John Ives, 1st 4 Fire and Security Limited

MTD Compliance Starts Here

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