Five things to check to make sure your systems are MTD ready

Making Tax Digital (MTD) for Income Tax is coming soon and is HM Revenue and Customs’ (HMRC) way of making tax filings more efficient and boosting compliance.

In April 2026, sole traders and landlords with gross income of £50,000 or more will need to make the change to MTD, but there is much work to be done before then.

Rather than wait until the deadline, here are five things you can do now to prepare.

1. Verify your digital record-keeping

To comply with MTD, business records will need to be digitised, and this should be achieved with HMRC-compliant software.

The days of paper ledgers and disconnected documents scattered across various devices are soon to be a thing of the past.

Information must now be stored securely in a centralised location that is more easily accessible.

You should verify that someone could file a fully accurate tax return using the collated data and address any gaps now before the deadline hits.

2. Confirm your software compatibility

While getting everything ready for MTD, you should check that your software will work for both record-keeping and submissions.

Now is the time to look into the software available to be certain that it will meet the requirements for MTD.

Excel spreadsheets can still be used if the thought of changing to new software is unappealing, but you must be able to link them to HMRC’s systems using a bridging solution.

The cloud-accounting platforms do have their advantages, though, and it is wise to consider swapping to one eventually.

3. Ensure workflow integration

You will need to review every aspect of your operations to make sure that all of the relevant information is being pulled into the correct place to make your quarterly MTD filings.

If your workflows are still disjointed or fragmented, then you run a higher risk of missing invoices, not properly recording expenses, or other surprises that could lead to non-compliance.

4. Train your team and assign responsibility

If you have a team, then it is important that they do not hinder the process and are trained to use the MTD-compliant software.

Any new responsibilities that befall them in terms of gathering and recording information should not come as a surprise to them.

Regularly train staff to make sure that they stay fully compliant with the requirements of MTD.

5. Test the reporting process

While there is still time before MTD comes into full effect, you should run tests and trials.

Get into the habit of compiling your data every three months so that you are prepared to submit your quarterly filings – a core requirement of MTD.

Getting out of the habit of an annual Self-Assessment tax return early can help you discover any issues before you are subject to HMRC’s scrutiny.

Early preparation and planning can reduce the risk of late submissions and penalties when the MTD deadline hits next year.

For expert guidance on getting ready for Making Tax Digital for Income Tax, speak to our team today.