Making Tax Digital: More Businesses Will Be Affected from April 2027

Making Tax Digital (MTD) for Income Tax is already underway for some self-employed individuals and landlords. From April 2027, the income threshold reduces to £30,000, bringing many more taxpayers into the regime.

If you are affected, you will need to:

• Keep digital business records
• Use MTD-compatible software
• Submit quarterly updates to HMRC
• Complete an annual finalisation process

While many taxpayers are already comfortable using accounting software, others currently rely on spreadsheets, paper records or manual processes. The move to MTD may therefore require changes to record-keeping systems, software and reporting procedures.

Starting early can make the transition much smoother and help avoid last-minute disruption when the rules become mandatory.

What should you do now?

If you are self-employed or receive rental income, review your current bookkeeping and record-keeping arrangements to determine whether they will meet the new requirements.

How James Todd & Co can help

We can help you prepare well in advance of the changes by:

• Assessing whether the MTD rules will affect you
• Reviewing your current record-keeping processes
• Recommending suitable MTD-compatible software
• Assisting with software setup and training
• Providing ongoing bookkeeping and compliance support
• Managing your quarterly submissions and annual finalisation process on your behalf, where required

James Todd & Co Tip

Although April 2027 may seem a long way off, businesses and landlords who start preparing early are likely to find the transition much easier. Reviewing your systems now will give you time to make any necessary changes before the new requirements become mandatory.