Making Tax Digital Support
Making Tax Digital is HMRC's requirement for certain taxpayers to keep records digitally and send information to HMRC using compatible software. It already applies to VAT registered businesses and is being introduced for Income Tax in stages. Sterling Crest Accountants helps you work out whether and when it applies to you, set up suitable software and records, and make the required submissions.
Sterling Crest Accountants provides this service to clients throughout the United Kingdom. Consultations are arranged in advance by telephone or online meeting. Our registered office is in Leeds, West Yorkshire.
About Making Tax Digital
Making Tax Digital for VAT requires VAT registered businesses to keep specified records digitally in functional compatible software and to submit VAT Returns through that software. Records must be carried between different pieces of software using digital links rather than retyping.
Making Tax Digital for Income Tax is being phased in according to qualifying income. Qualifying income is gross income from self employment and property before expenses, assessed by HMRC from your Self Assessment return for an earlier tax year. Employment income, dividends and most other income do not count towards the threshold.
Once you are within Making Tax Digital for Income Tax, you keep digital records, send quarterly updates of income and expenses to HMRC through compatible software, and complete a tax return by 31 January after the end of the tax year. Partnerships will follow at a later date that HMRC has not yet set.
Some people can be exempt, for example where they are digitally excluded. Being exempt does not remove the need to report income through Self Assessment. We check eligibility and exemptions against current HMRC guidance before recommending any changes.
Who this service is for
- VAT registered businesses of any size
- Sole traders whose gross self employment income may exceed the qualifying thresholds
- Self employed individuals who also have other sources of qualifying income
- Businesses moving from spreadsheets to compatible software
- Taxpayers who have received a letter from HMRC about Making Tax Digital
- Clients who want quarterly updates prepared and submitted for them
Common challenges
- Uncertainty about whether qualifying income is over the threshold
- Records kept in spreadsheets without digital links
- Software chosen without checking HMRC recognition
- Quarterly update dates not built into the year
- Confusion between quarterly updates and the annual tax return
- Letters from HMRC that are unclear about what to do next
What is included
- Review of qualifying income and the likely start date for Income Tax
- Check of current Making Tax Digital for VAT compliance
- Advice on compatible software for your type of records
- Setting up or reviewing digital records and digital links
- Agent authorisation and sign up steps where we act for you
- Preparation and submission of quarterly updates where engaged
- VAT Return submission through compatible software where engaged
- Year end tax return preparation where engaged
- A written calendar of update and filing dates
- Exemption review where your circumstances may qualify
How the service works
- 1.Review your latest tax returns, VAT status and record keeping
- 2.Confirm whether and when Making Tax Digital applies
- 3.Agree software and who maintains day to day records
- 4.Set up software, digital links and agent authorisation
- 5.Prepare and submit updates or returns after your approval
- 6.Review records before each period to keep submissions on time
Documents normally required
- Latest Self Assessment tax returns
- VAT registration details and recent VAT Returns
- Current bookkeeping records or spreadsheets
- Any letters received from HMRC about Making Tax Digital
- Software subscription and access details
- Government Gateway or agent authorisation details
UK compliance information
- Thresholds and start dates are set by HMRC and can change. We check current guidance on GOV.UK before advising.
- Software subscriptions are paid directly to the software provider.
- You remain responsible for the accuracy of records you maintain yourself.
- Partnership start dates have not yet been confirmed by HMRC.
Key deadlines
Making Tax Digital for VAT applies now to VAT registered businesses unless HMRC has granted an exemption. For Income Tax, individuals registered for Self Assessment with income from self employment or property must use it based on their qualifying income from those sources: qualifying income over £50,000 in the 2024 to 2025 tax year means using it from 6 April 2026; qualifying income over £30,000 in the 2025 to 2026 tax year means using it from 6 April 2027; qualifying income over £20,000 in the 2026 to 2027 tax year means using it from 6 April 2028. A Self Assessment tax return is still required for the year before you start.
Confirm official dates and rules on GOV.UK. Rules and thresholds can change.
What this work helps you maintain
- A clear answer on whether and when Making Tax Digital applies
- Software and records set up before the first deadline
- Quarterly updates and returns prepared from reconciled records
- One calendar covering VAT, quarterly updates and the tax return
- Exemption questions checked against HMRC guidance
Related services
- VATVAT registration and VAT Return support for UK businesses, including digital record requirements, applicable VAT schemes and Making Tax Digital compliance.
- Self AssessmentSelf Assessment Tax Returns for individuals, sole traders, company directors and other taxpayers, prepared from the relevant income, expenses and supporting tax information.
- Cloud AccountingSelection guidance, setup, chart of accounts, bank feeds and training for cloud accounting platforms used with our bookkeeping.
- BookkeepingStructured bookkeeping for sales, purchases, bank transactions and business records, helping maintain accurate financial information for VAT, payroll, accounts and tax reporting.
- Sole Trader AccountsYear end accounts for sole traders, including profit and loss and balance sheet where needed, aligned with self assessment reporting.
Frequently asked questions
For VAT, it applies to all VAT registered businesses unless HMRC has granted an exemption. For Income Tax, it applies to individuals registered for Self Assessment with income from self employment or property, where their qualifying income is over the relevant threshold: qualifying income over £50,000 in the 2024 to 2025 tax year means using it from 6 April 2026; qualifying income over £30,000 in the 2025 to 2026 tax year means using it from 6 April 2027; qualifying income over £20,000 in the 2026 to 2027 tax year means using it from 6 April 2028.
Gross income from self employment and property, before expenses are deducted. Employment income, pensions, dividends and savings interest are not included. HMRC uses your Self Assessment return for an earlier tax year to assess it.
The thresholds apply in stages: qualifying income over £50,000 in the 2024 to 2025 tax year means using it from 6 April 2026; qualifying income over £30,000 in the 2025 to 2026 tax year means using it from 6 April 2027; qualifying income over £20,000 in the 2026 to 2027 tax year means using it from 6 April 2028. HMRC assesses qualifying income from the Self Assessment return for the earlier tax year shown.
Records of each business income and expense transaction kept in compatible software, rather than on paper or in disconnected files. Information moving between software must use digital links, such as an import or an automatic connection, rather than being copied by hand.
Software that HMRC recognises as compatible with Making Tax Digital for the tax concerned. Some products cover VAT only, some cover Income Tax, and some cover both. We recommend options based on how you keep records today.
Yes. Making Tax Digital for Income Tax adds quarterly updates during the year, but a tax return is still submitted by 31 January after the end of the tax year.
Spreadsheets can sometimes be used alongside bridging software that connects them digitally to HMRC, but records must be linked digitally. We review your current set up and recommend the simplest compliant route.
HMRC writes to people it expects to be in scope, but it is still your responsibility to check whether Making Tax Digital applies. We can check this for you from your recent returns.
No. Making Tax Digital for Income Tax applies to individuals. Limited companies are within Making Tax Digital for VAT if VAT registered, and file Company Tax Returns through commercial software.
Discuss Making Tax Digital with Sterling Crest
Book a free consultation or send an enquiry. Scope and fees are confirmed in writing before any engagement begins.
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