Making Tax Digital for Income Tax / Kennedys Accounting

Making Tax Digital for Income Tax / Kennedys Accounting

Making Tax Digital is now mandatory for many landlords and self-employed individuals. Find out what you need to do before the deadline with expert guidance from Kennedys Accounting.

Is Your Business Ready for the 7 August Deadline?

More than 400,000 landlords and self-employed individuals are yet to register for Making Tax Digital (MTD) for Income Tax, despite the first quarterly filing deadline being just around the corner.

If your combined income from self-employment and/or property exceeded £50,000 in the 2024/25 tax year, you are now legally required to comply with Making Tax Digital for Income Tax (MTD IT), unless you qualify for a specific exemption.

Need Help with Making Tax Digital?

Kennedys Accounting can take care of the entire process for you.

Whether you need help registering with HMRC, selecting compatible software, maintaining digital records or submitting your quarterly updates, our experienced team is here to help.

Contact Kennedys Accounting today for friendly, expert advice and let us make Making Tax Digital simple.

What is Making Tax Digital for Income Tax?

Making Tax Digital (MTD) is HMRC’s new digital reporting system, designed to modernise the way landlords and self-employed individuals keep records and report their income.

Instead of submitting one annual Self-Assessment tax return, taxpayers within MTD are required to:

• Keep digital accounting records.
• Use HMRC-approved software.
• Submit quarterly updates of income and expenses.
• Complete an end-of-year finalisation process.

It’s important to remember that the quarterly update is not your tax return. It is simply a summary of your income and expenses submitted electronically to HMRC.

Nearly Half of Eligible Taxpayers Have Yet to Register

HMRC estimates that around 864,000 taxpayers fall within the first phase of Making Tax Digital.

However, recent figures show that almost 430,000 landlords and sole traders have still not registered, despite the legal requirement to do so.

More than 100,000 quarterly updates have already been submitted, but many taxpayers still need to prepare for their first filing.

Interestingly, almost 70% of registrations have been completed by accountants, demonstrating how valuable professional support can be during the transition.

What is the Deadline?

The first quarterly update covers the opening three months of the tax year and must be submitted by 7 August.

Although HMRC has confirmed that late filing penalties will not apply during the first year, the obligation to register and file remains.

Leaving registration until the last minute could result in unnecessary delays and added pressure.

Penalties Are Coming

While HMRC is taking a light-touch approach during the first year, penalties will begin from 6 April 2027.

The new points-based penalty system means:

• One penalty point for each missed quarterly submission.
• Four points trigger a £200 fixed penalty.
• Continued non-compliance may lead to further penalties.

Getting your systems in place now will make future compliance much easier.

Software is Improving All the Time

Thousands of taxpayers have already participated in HMRC’s beta testing programme.

Although some software providers are still releasing updates for year-end reporting, many businesses have found the quarterly submission process straightforward once their bookkeeping is up to date.

Even More Taxpayers Will Be Affected

Making Tax Digital is only the beginning.

The qualifying income threshold will reduce over the coming years:

• From April 2027 – qualifying income over £30,000
• From April 2028 – qualifying income over £20,000

This means millions more landlords and self-employed individuals will soon be required to comply.

Don’t Wait Until the Deadline

Whether you’re already using accounting software or still keeping manual records, now is the ideal time to prepare.

The earlier you register, the more time you’ll have to become familiar with the new reporting requirements and avoid unnecessary stress.

How Kennedys Accounting Can Help

At Kennedys Accounting, we help landlords and self-employed individuals make the move to Making Tax Digital with confidence.

Our experienced team can:

✓ Register you for MTD with HMRC.

✓ Recommend and implement the right software for your business.

✓ Set up compliant digital bookkeeping.

✓ Prepare and submit your quarterly updates.

✓ Complete your year-end reporting.

✓ Provide ongoing support whenever you need it.

Whether you’re already within the MTD rules or preparing for the future, we’re here to make the process as simple and straightforward as possible.

Ready for Making Tax Digital?

Don’t leave it until the last minute.

Contact Kennedys Accounting today to discuss your Making Tax Digital requirements. We’ll ensure you’re registered correctly, using the right software, and fully compliant with HMRC’s latest regulations—giving you more time to focus on your business.

📞 Call our team today – 01233 539501

📧 Email us to arrange a no-obligation consultation – info@kennedysaccounting.uk

Kennedys Accounting – Helping businesses and landlords stay compliant, save time and embrace digital accounting with confidence.