Staying Compliant with Making Tax Digital Doesn’t Have to Be a Full-Time Job

Trying to keep up with constant tax rule changes can feel like a full-time job—especially when you’re a landlord or running a small business . If you’ve heard about Making Tax Digital (MTD) for small businesses but aren’t quite sure what it means or what you need to do, you’re not alone.

This guide breaks down the essentials of MTD for Income Tax Self Assessment (MTD for ITSA) in simple, plain English. No jargon, no fuss. Whether you’re a sole trader or a landlord, we’ll walk you through what the changes mean, why they matter, and how to get everything set up without turning it into a major project.

Our goal? To help you stay compliant with HMRC while keeping things as stress-free as possible.

Understanding Making Tax Digital (MTD)

MTD is a government initiative designed to modernise the tax system and reduce mistakes. Instead of relying on paper records or one big annual tax return, MTD for ITSA requires small businesses and landlords to keep digital records and submit quarterly tax updates using HMRC-compatible software.

If you run a small business or earn rental income, MTD for ITSA may soon apply to you. HMRC is phasing the changes in:

• From April 2026 — anyone earning over £50,000 in combined business and/or property income.
• From April 2027 — those earning between £30,000 and £50,000.

Under MTD for ITSA, you’ll need to keep your bookkeeping digitally and submit:

• Quarterly updates
• End of Period Statements (EOPS)
• A Final Declaration

Spreadsheets alone won’t be enough unless they link through approved bridging software.

The benefit? You’ll have a more accurate and up-to-date view of your tax position throughout the year, reducing the stress of last-minute January deadlines.

Understanding what applies to you early helps you prepare properly, avoid penalties, and spread your admin more evenly across the year.

Why MTD for Small Businesses Matters More Than Ever

Manual bookkeeping and paper records used to be fine for most sole traders and landlords, but HMRC now expects a digital-first approach. That means relying on proper accounting software rather than handwritten notes or loose receipts.

Running a small business already involves juggling endless tasks. Using digital accounting software helps streamline your workload by:

• reducing manual data entry
• cutting down errors
• organising receipts and expenses
• providing real-time insights into your tax position

With quarterly reporting under MTD for ITSA, you’ll also avoid the shock of a large unexpected tax bill at year-end.

HMRC has been clear: once you fall within the Making Tax Digital rules, compliance won’t be optional. Using outdated methods increases the risk of errors, missed deadlines, and penalties.

Digital tools also allow you to monitor how your business is performing month-to-month, not just once a year when you file your return.

Switching may sound daunting, but once it’s set up, it quickly becomes part of your normal routine—just like checking emails or sending invoices. 

Choosing the Right Software to Stay Compliant

Picking the right MTD for ITSA software is a key step—but it doesn’t have to be complicated. At A J Wheeler, we recommend Sage as our go-to software for small businesses and landlords preparing for digital tax reporting.

Why Sage?

• It’s HMRC-recognised for MTD digital reporting.
• It offers simple, intuitive tools that work brilliantly for sole traders and landlords.
• It helps you keep accurate, compliant digital records.
• You can log expenses, track income, upload receipts, and manage everything in one place.
• It’s easy to use, even if you’re not confident with technology.

If you’re used to spreadsheets, Sage can integrate smoothly, making the transition far easier. The software also updates automatically with any HMRC rule changes, so you’re always compliant without extra effort.

Plus, as an A J Wheeler client, you can get Sage at a discounted rate.

This gives you a powerful, reliable system for less than going directly to the provider.

Using Sage also makes collaboration effortless. We can access your accounts in real time and support you quickly, without delays or endless email chains.

Choosing Sage gives you a clear, cost-effective route to staying compliant with MTD for ITSA while simplifying your day-to-day admin.

Top Tips to Make Compliance Simple and Stress-Free

Start by setting reminders for your quarterly tax update deadlines. Add them to your phone or calendar app and set alerts a few days early, so nothing catches you off guard.

Keep your digital records updated regularly. Logging expenses and income as you go avoids bigger jobs later and reduces the chance of errors.

Choose software that suits your workflow—something easy to understand, reliable, and fully MTD-compliant. Sage ticks all these boxes.

Build a habit of reviewing your transactions weekly. Match receipts, check invoices, and keep everything tidy. This simple step saves hours down the line.

Back up your data regularly. Most cloud-based tools, including Sage, do this automatically—but it’s always worth double-checking.

And remember — you don’t need to handle MTD for ITSA alone.

At A J Wheeler, we can support you through the entire process. Whether you want full bookkeeping support or just help getting set up, we offer affordable options to suit every business and budget.

Finally, stay aware of HMRC updates as the rollout progresses. You don’t need to read every detail—just keep an eye on major changes so nothing surprises you.

With the right systems and the right support, staying compliant becomes much easier.

Making Tax Digital Doesn’t Have to Be Daunting

Getting to grips with MTD for ITSA might feel overwhelming, but with the right tools and a bit of guidance, it’s much simpler than it seems. We’ve covered what MTD for ITSA means, why it matters for small businesses and landlords, and how choosing the right software—like Sage—can save time, reduce errors, and keep you compliant. 

A few good habits and the right support from A J Wheeler can make digital tax reporting smooth, stress-free, and far more manageable.

MTD for ITSA is here to stay—so preparing now means fewer headaches later and more time to focus on running and growing your business.