For many business owners, MTD feels overwhelming initially.
More deadlines.
More software.
More reporting requirements.
For businesses still relying on paper records or year-end bookkeeping, the changes can feel significant.
The good news?
Most businesses do not need to transform overnight.
With the right systems and support, MTD can become a much smoother process than many initially expect.
MTD is more than quarterly submissions.
Most business owners think Making Tax Digital is simply another filing requirement.
It isn’t.
MTD represents a shift toward more regular financial visibility, better record keeping, and fewer year-end surprises.
Businesses that prepare properly often gain:
✔ Better visibility over tax liabilities
✔ More organised bookkeeping
✔ Fewer last-minute pressures
✔ Better understanding of cash flow
✔ More confidence in the numbers
That’s why AHBS approaches MTD as part of a wider financial clarity process — not just another deadline.
What does the MTD process actually look like?
STEP 01
Digital records
Income and expenses are recorded digitally throughout the year.
STEP 02
Quarterly updates
A summary update is submitted to HMRC every 3 months.
STEP 03
Ongoing visibility
Businesses gain clearer visibility over tax liabilities and financial performance throughout the year.
STEP 04
Finalisation process
A final declaration confirms the year-end position and completes the tax process.
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Who will need to follow Making Tax Digital (MTD)?
From April 2026, Making Tax Digital for Income Tax will apply to many sole traders and landlords across the UK.
If your combined income from self-employment and/or property exceeds £50,000, you will likely need to comply with MTD rules.
This means:
✔ Keeping digital financial records
✔ Using compatible software
✔ Submitting quarterly updates to HMRC
✔ Completing an end-of-year finalisation process
The threshold is expected to reduce further in future years, meaning more businesses and landlords will eventually fall within the rules.
Many business owners are already preparing early to avoid last-minute disruption.
What will actually change under MTD?
For many business owners, the biggest change is not the software — it’s the frequency.
Instead of completing one annual tax return using records gathered at year-end, MTD introduces more regular reporting throughout the year.
This typically includes:
Quarterly updates
A summary of income and expenses submitted to HMRC every 3 months.
Digital record keeping
Financial records must be stored digitally using compatible systems.
End-of-year finalisation
A final declaration process confirming the accuracy of the year’s figures.
While this may sound overwhelming initially, many businesses actually benefit from becoming more organised and gaining better visibility over their finances throughout the year.
Will I need accounting software?
In most cases, yes.
HMRC requires businesses within MTD to maintain digital records using compatible software or bridging systems.
Depending on your business, suitable options may include:
✔ Xero
✔ FreeAgent
✔ QuickBooks
✔ Sage
✔ Spreadsheet bridging software
The right setup depends on:
✔ the size of the business
✔ how records are currently maintained
✔ the level of support required
✔ how much visibility the business owner wants over the numbers
At AHBS, we help clients choose systems that are practical, manageable, and appropriate for the way they actually operate.
What happens if businesses ignore MTD?
Businesses that fall within MTD requirements but fail to comply may face:
✔ Penalty points
✔ Financial penalties
✔ Missed submission deadlines
✔ Increased stress at year-end
✔ Poor visibility over tax liabilities
However, the biggest risk for many businesses is simply leaving preparation too late.
Businesses that prepare early often find the transition far smoother and less disruptive than expected.
How AHBS helps businesses prepare for MTD
Our approach to MTD is designed around clarity, organisation and practical financial visibility — not simply ticking compliance boxes.
Depending on the business, support may include:
✔ Cloud accounting setup
✔ Bookkeeping support
✔ VAT and payroll integration
✔ Digital document systems
✔ Quarterly reporting processes
✔ Financial visibility throughout the year
✔ Ongoing support and guidance
The goal is simple:
helping business owners stay informed, organised and ahead of surprises as MTD becomes part of day-to-day business operations.
COMMON CONCERNS
01
Will I need to pay tax quarterly?
No — quarterly submissions are reporting updates, not necessarily quarterly tax payments.
02
Can I still use spreadsheets?
In some cases, yes. However, additional bridging software may still be required to remain compliant.
03
Will MTD replace self assessment?
No. An end-of-year finalisation process will still be required alongside quarterly reporting.
04
What if my records are currently paper-based?
Many businesses are still using paper records today. The important thing is preparing gradually and implementing systems that are practical and manageable.
Preparing for MTD doesn’t need to feel overwhelming.
Whether you need help choosing software, improving bookkeeping processes, or understanding how MTD will affect your business, AHBS is here to help.
Our goal is simple:
helping businesses stay informed, organised and ahead of surprises as MTD becomes part of day-to-day operations.
Supporting businesses across Ilkeston, Derbyshire & Nottinghamshire
Based in Ilkeston, AHBS supports businesses across Derbyshire and Nottinghamshire with practical MTD preparation, cloud accounting systems and ongoing financial oversight.