Don’t Go It Alone: Why An Accountant Is Your Best Ally For Making Tax Digital In 2026

The UK’s tax landscape is undergoing its most significant transformation in decades with the phased rollout of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA). From April 2026, many self-employed individuals and landlords will be mandated to keep digital records and submit quarterly updates to HMRC using MTD-compatible software. While the promise is a more efficient and accurate tax system, navigating these new regulations can be complex. This is where the expertise of an accountant becomes invaluable.

Understanding the Shift: What MTD for ITSA Means for You

Currently, self-employed individuals and landlords typically submit one annual Self Assessment tax return. MTD for ITSA fundamentally changes this. From April 2026, if your qualifying income (gross income from self-employment and/or property) exceeds £50,000, you will be required to:

• Keep digital records: This means moving away from paper ledgers or basic spreadsheets to MTD-compatible software.
• Submit quarterly updates: Instead of one annual submission, you’ll need to send summaries of your income and expenses to HMRC every three months.
• Complete an End of Period Statement (EOPS) and a Final Declaration: These will replace the traditional Self Assessment tax return, finalising your tax position for the year.

The thresholds for MTD will then expand, with those earning over £30,000 joining from April 2027 and those over £20,000 from April 2028.

The Perils of DIY MTD Compliance

While the idea of managing your taxes digitally might sound straightforward, the reality can be fraught with challenges for those going it alone:

• Software selection and implementation: Choosing the right MTD-compatible software from the myriad of options can be daunting. Setting it up correctly and integrating it with existing systems requires a good understanding of both accounting principles and technology.
• Digital record-keeping nuances: MTD has specific requirements for what constitutes digital records and how they must be maintained. Errors here can lead to issues down the line.
• Quarterly reporting accuracy: Each quarterly update needs to be accurate and reflect your income and expenses correctly. Mistakes can lead to incorrect estimated tax bills and potential penalties.
• Understanding tax adjustments: The quarterly updates are summaries, but the final declaration requires various accounting and tax adjustments. Missing these can result in over or underpaying tax.
• Staying updated with evolving regulations: HMRC’s MTD guidance is constantly evolving. Keeping abreast of these changes while running a business can be a significant time drain.
• Penalties for non-compliance: The new penalty regime for late submissions and late payments can be costly.

How an Accountant Becomes Your MTD Superpower

Engaging an accountant to assist with MTD is not just about compliance; it’s about leveraging expertise to streamline your financial processes and provide peace of mind. Here’s how they can help:

1. Expert Software Guidance: Accountants are well-versed in the various MTD-compatible software options. They can assess your business needs and recommend the most suitable solution, often at preferential rates. They can also help with the initial setup and integration.
2. Seamless Transition to Digital Records: An accountant can guide you through the process of migrating your current records to a digital format, ensuring all data is accurately captured and compliant with MTD requirements. They can also provide training on how to use the new software effectively.
3. Accurate Quarterly Submissions: They will meticulously prepare and submit your quarterly income and expense updates, ensuring accuracy and adherence to deadlines. This reduces the risk of errors and potential penalties.
4. Optimised Tax Planning: With real-time financial data available through MTD, accountants can offer proactive tax planning advice throughout the year, helping you understand your tax liability and make informed decisions to minimise your tax burden legally.
5. Navigating Complexities and Allowances: Accountants possess a deep understanding of tax legislation. They can ensure all eligible expenses, reliefs, and allowances are correctly applied in your final declaration, preventing overpayments and maximising your legitimate deductions.
6. Proactive Problem Solving: Should any issues arise with your digital records or HMRC submissions, your accountant can act swiftly to resolve them, preventing minor glitches from escalating into significant problems.
7. Time and Stress Savings: By entrusting your MTD compliance to a professional, you free up valuable time and mental energy to focus on what you do best – running your business or managing your properties. The stress of staying on top of complex tax regulations is removed.

Conclusion

Making Tax Digital for Income Tax is a fundamental shift that will impact a significant number of self-employed individuals and landlords. While the intention is to modernise the tax system, the transition can be complex. Rather than facing these new regulations alone, partnering with a qualified accountant offers invaluable support. Their expertise will not only ensure compliance and avoid penalties but also provide opportunities for better financial management, proactive tax planning, and ultimately, greater peace of mind as you navigate the digital tax era. Don’t wait until the last minute; start the conversation with an accountant today to prepare for MTD in 2026. Get in touch with our team on 028 3752 2909.