How to Implement MTD for Tax Compliance

MTD for income tax - getting ready! I have had a number of conversations in the last week or so about preparing for mandation for clients with gross income (from self employment and property) of more than £50,000 and I'm really worried that many firms are lagging behind in preparing for the change. This is the biggest change to affect us (as professional advisers) and our clients since 1996/97 when self assessment was introduced. How are you preparing for these changes? There are a number of things you need to do, but at this stage - around 21 months out from the first mandation date here are a few things you might want to consider: * how many clients will be affected by the first wave of mandation? Are they already on digital record keeping? * how do you obtain information from these clients? Even if they have a bank feed, do they upload receipts or are you left 'Googling' the payee to find out what the expense is for? Do clients expect you to create records from a bag of receipts and (if you are lucky) bank statements? This will be incredibly labour intensive so you will need sufficient staff resource to do this. And the timing of the updates (all at the same time for every client) is a major challenge for staffing. * have you talked to affected clients about the impact on your fees? You may well want to keep fee increases to a minimum but there will be without doubt more to do - even if it is only touch points with clients. * getting clients on to a separate bank account will be a HUGE benefit. I know from my own practice that there is resistance to this - even if they are not going over to formal business banking, some just want the ease of a single account for personal and business transactions. But this makes the bookkeeping task so much more onerous. I'm thinking of quoting more for mixed bank account clients (I operate on fixed fee up front quotes) as it is really more labour intensive. * You need to have a think about the conversations you have with clients on a more general level - and then drill down into specifics. I'm talking to each of my clients individually about what their record keeping needs are in the light of MTD (do they need more support?) and how we can work with them to land good records without them feeling overburdened by our fees - but at the same time supported to grow their businesses without the drag of bookkeeping if they don't feel it is for them. * For a few clients introducing cloud based bookkeeping with a bank feed has transformed their businesses. Only this week a client who has been hugely reluctant to move from spreadsheets is now very happy with the reduced workload once I have put her on a cloud product with a bank feed. It has taken 2 years to move her, and in the end I put my foot down as she is now under OSS for VAT. But she is more than happy - try pushing harder - this will really accelerate your preparation for MTD.

MTD for Income Tax → New thresholds announced recently… If you're self-employed or earn rental income, this one’s for you. HMRC has just confirmed the final Making Tax Digital (MTD) thresholds, and they’re coming in stages: 📌 £50k+ turnover → Mandatory from April 2026 📌 £30k+ turnover → Mandatory from April 2027 📌 £20k+ turnover → Mandatory from April 2028 And this isn’t based on profit. It’s based on total turnover from self-employment AND rental income combined. So even if your profit is low, if your combined income crosses these thresholds, MTD rules apply. Here’s what that means: 🚨 You’ll need to: - Use digital accounting software - Keep digital records of income and expenses - Submit quarterly updates to HMRC (plus a final year-end submission) This is a huge shift, especially for landlords and small business owners who still use spreadsheets or manual tracking. Start preparing early, and the transition doesn’t have to be painful. ✅ Choose the right software ✅ Get into the habit of real-time record keeping ✅ Speak to your accountant about what this means for you Because if there’s one thing you don’t want: It’s HMRC chasing you for something that could’ve been avoided with better planning. - Want accounting tips without the jargon? I send out a no-nonsense newsletter breaking down what business owners actually need to know → tax changes, cash flow tips, accounting hacks, and more. If you want to stay ahead without falling asleep mid-sentence, sign up below 👇

#MTDITSA starts 6th April 2026 For any accountants or bookkeepers who haven’t joined the pilot, this post is for you. If you are using software to submit SA100 tax returns, you should be able to export some of the data into excel to build your checklist. The goal is to: a) identify a couple of clients who you can sign up on the pilot program. b) Get at least one client to agree c) Get some experience on filing MTD ITSA quarterly returns d) Use the knowledge to decide how you will get ready for April 2026. STEP 1 First analyse your SA100 clients. 1. Client info a. Full Name b. DOB c. UTR d. NINO e. UK resident [Y/B] f. Business name g. Trade h. start date [actual or best guess] 2. Income analysis a. Trading Income b. Property income – sole ownership c. Property income – joint d. Other income eligible (eg state pension, private pension, dividends, UK interest) e. Other income complex (eg Foster carer, partnership, foreign) f. Losses b/f g. High income Child Benefit charge h. Married couples allowance i. Blind person allowance j. Cash or accruals basis k. Calendar or tax quarter basis 3. Tax Account a. Tax fully paid? [Paid/Arrears] b. Payment plan in place? [PP/blank] 4. Software & Tech a. Which method is used to prepare financial records? (Eg QB, Xero, Sage FreeAgent, Spreadsheet, Manual b. Which bank? c. business or personal bank a/c? d. client email address? [or none] e. client's mobile number [or none] f. smartphone [Y/N] 5. Client records a. Format of bank statements [pdf, excel, paper, image]? b. How are source documents provided to allow income & expenses to be categorised? [ digitally/manual/partial/none] 6. Proposed Software a. Choose preferred option (if known) b. In advance: i. Check HMRC for approved software packaged. ii. Check software provider’s pricing iii. Assess your skills for using it. 7. Client Collaboration (optional data to fill in later) a. Can you get bank statements? b. Can you get source docs? c. Does client respond to queries? [Quick/Average/Slow/Rare] 8. Special Circumstances a. Age/Religion/Location/Other 9. Eligibility checker a. for use later STEP 2 Identify a client to join the pilot b. Filter your data into: i. £50,000 turnover ii. No property iii. No foreign income iv. No tax arrears v. Business bank account vi. Smart phone vii. Email viii. Collaborative c. Check eligibility using HMRC eligibility checker (but don’t sign client up yet) STEP 3 Send a letter/email/phone to discuss the April 2026. Ask if they want to join the pilot? (In advance, decide on your service offering – I did free bank recs, queries and filing and offered to 3 clients. 1 accepted.) STEP 4 Contact the software provider and request to join the pilot. They will guide you to sign up client using HMRC’s link to join the pilot. https://lnkd.in/eJvD_vU3 Good luck. ❤️

𝗙𝗶𝘃𝗲 𝗥𝗲𝗰𝗼𝗿𝗱-𝗞𝗲𝗲𝗽𝗶𝗻𝗴 𝗦𝘆𝘀𝘁𝗲𝗺𝘀 𝗧𝗵𝗮𝘁 𝗞𝗲𝗲𝗽 𝗬𝗼𝘂 𝗠𝗧𝗗-𝗥𝗲𝗮𝗱𝘆 𝗔𝗹𝗹 𝗬𝗲𝗮𝗿 𝗜𝗺𝗮𝗴𝗶𝗻𝗲 𝘁𝗵𝗶𝘀: It’s the last week before your quarterly MTD submission deadline. You scramble to find receipts from repairs, invoices for your letting agent, and bank statements for rental income. Sound familiar? You’re not alone. Many landlords treat tax time like a fire drill - and it causes stress, errors, and even costly penalties. But it doesn’t have to be this way. With Making Tax Digital (MTD), keeping your records tidy isn’t optional - it’s a legal requirement. The good news? If you have a system that works for you, staying compliant can be effortless, freeing up your time and energy to focus on growing your portfolio. Here’s how successful landlords stay ahead: ↗ 𝗖𝗹𝗼𝘂𝗱 𝗔𝗰𝗰𝗼𝘂𝗻𝘁𝗶𝗻𝗴 𝗦𝗼𝗳𝘁𝘄𝗮𝗿𝗲 - Platforms like Xero or QuickBooks automate bank feeds, allow you to tag rental income and expenses, and generate HMRC-compatible reports. ↗ 𝗦𝗵𝗮𝗿𝗲𝗱 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 𝗙𝗼𝗹𝗱𝗲𝗿𝘀 - A well-organized folder on Google Drive or Dropbox, broken down by month and category (repairs, utilities, mortgage statements). ↗ 𝗦𝗽𝗿𝗲𝗮𝗱𝘀𝗵𝗲𝗲𝘁 𝗟𝗲𝗱𝗴𝗲𝗿𝘀 - For smaller portfolios, spreadsheets can work wonders. You can customize formulas to calculate totals & track allowable expenses. ↗ 𝗕𝗮𝗻𝗸 𝗙𝗲𝗲𝗱 𝗥𝗲𝗰𝗼𝗻𝗰𝗶𝗹𝗶𝗮𝘁𝗶𝗼𝗻 - Connect your property bank account to your accounting system and reconcile weekly. This prevents surprises and helps you spot any income or expense that’s missing. ↗ 𝗥𝗲𝗰𝗲𝗶𝗽𝘁 𝗦𝗰𝗮𝗻𝗻𝗶𝗻𝗴 𝗔𝗽𝗽𝘀 - Apps like Dext or Hubdoc scan, digitize, and categorize receipts, so you never lose important proof of expense. Because MTD requires digital records and quarterly updates - no more waiting until January to scramble. Your cash flow depends on it. 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆: Choose one system that fits your style. The best system isn’t the fanciest one - it’s the one you actually use, regularly. Set aside 15 minutes every week to update your records. Your future self - and your accountant - will thank you. 📅 If you’re overwhelmed by MTD or unsure where to start, DM me or book a free call and I’ll you draft up a plan! 💬 What’s your biggest struggle with property record keeping? Drop a comment. ♻️ Repost & share this to help fellow landlords stay compliant and stress-free. 👤 Follow me, Usman Butt, for tax strategies that make property investing simpler. Video Credits: All rights are reserved to the rightful owner. Please DM for credits or removal.