How to Prepare for Making Tax Digital (MTD) as a Self-Employed Person

Making Tax Digital (MTD) is coming for self-employed individuals earning over £50,000 from April 2026. Learn how to prepare with this step-by-step guide — from choosing the right software to managing quarterly submissions and staying compliant with HMRC.

Scottish Accountancy

2/14/2025

If you're self-employed, change is coming — and it's digital.

Making Tax Digital (MTD) is HMRC’s initiative to modernise the UK tax system. From April 2026, self-employed individuals earning over £50,000 annually will be legally required to keep digital records and submit quarterly tax updates to HMRC using approved software. Those earning over £30,000 will follow in 2027.

At Scottish Accountancy Services, we know this shift may feel overwhelming. But with the right steps now, MTD can actually make managing your taxes easier and more efficient.

Here’s what you need to know — and how to get ready.

What Is Making Tax Digital?

MTD is HMRC’s push to digitise the tax system and reduce errors. Instead of submitting one Self Assessment tax return a year, MTD requires:

  • Quarterly digital submissions of income and expenses

  • Use of MTD-compatible software

  • A final end-of-period statement to confirm your tax position

The goal? Greater accuracy, transparency, and fewer last-minute surprises.

Who Will It Affect — and When?

Annual IncomeMTD for ITSA DeadlineOver £50,000April 2026£30,000–£50,000April 2027Below £30,000Date TBD (under review)

If you’re already VAT-registered, you may already be familiar with MTD for VAT — this is the same concept, but for Income Tax Self Assessment (ITSA).

5 Steps to Get Ready for MTD Now

1. Know Your Income

Start by reviewing your current earnings. If you’re near or over the £50,000 threshold, you’ll be required to comply with MTD by April 2026. If you're approaching that level, it's worth preparing early.

2. Choose MTD-Compatible Software

Free spreadsheets won't cut it anymore. You’ll need to use HMRC-approved software to:

  • Record income and expenses

  • Generate and send digital updates

  • Submit your annual finalisation statement

Popular MTD-ready software includes Xero, QuickBooks, FreeAgent, and Sage.

We can help you choose the best one based on your business type, budget, and comfort level.

3. Get Familiar with Quarterly Submissions

Under MTD, you’ll submit updates every three months, not once a year. While these updates won’t require finalised figures, they must be accurate and submitted on time.

Expect a new routine:

  • 4 quarterly updates

  • 1 end-of-period statement

  • 1 final declaration

4. Organise Your Records Digitally

Start keeping digital records of:

  • Sales and income

  • Business expenses

  • Invoices and receipts

If you’re still using paper, now’s the time to digitise. This not only helps you prepare for MTD but also improves year-round financial clarity.

5. Work with a Digital-Savvy Accountant

Transitioning to MTD is easier with a professional by your side. A qualified accountant can:

  • Set up your MTD software

  • Help you automate data entry

  • Ensure accurate quarterly submissions

  • Keep you compliant and audit-ready

At Scottish Accountancy Services, we’ve helped many clients move from spreadsheets and paper to fully digital solutions with minimal disruption.

Why Preparing Early Matters

Waiting until the last minute can lead to:

  • Penalties for late or incorrect filings

  • Stressful deadlines and rushed transitions

  • Missed deductions due to poor recordkeeping

Early action means fewer headaches — and more time to run your business.

Final Thoughts

Making Tax Digital isn’t just a government requirement — it’s an opportunity to modernise your finances, gain better visibility, and stay ahead of deadlines. The sooner you prepare, the smoother your transition will be.

Whether you're a freelance designer, contractor, landlord, or sole trader, our team at Scottish Accountancy Services is ready to help you adapt with confidence.

Ready to Go Digital?

📞 Contact us today for a free MTD-readiness check and let us guide you step-by-step through the transition.
✅ Simple setup.
✅ Trusted software.
✅ Stress-free compliance.