Making tax digital (MTD) is HMRC’s way of moving tax records online and for many sole traders, CIS workers, and small businesses, it’s a big change.
The good news? You can get MTD-ready in just three simple steps, even if paperwork is your least favourite part of the job.
What is making tax digital (MTD)?
Making tax digital is HMRC’s programme to make tax easier, more accurate, and entirely digital.
For Self Assessment taxpayers, this means:
- Keeping digital records of your income and expenses
- Sending quarterly updates to HMRC via compatible software
- No more end-of-year mad rush with piles of receipts
Step 1: Choose HMRC-approved MTD software
You can’t send MTD updates through spreadsheets alone you need HMRC-compatible software.
Look for software that:
- Connects directly to HMRC
- Lets you scan and store receipts
- Works on your phone as well as a computer
Tip: Some software offers free starter plans, but make sure it includes MTD Self Assessment support.
Step 2: Keep digital records from day one
Start recording income and expenses digitally now, even before MTD is compulsory for you.
This will:
- Make the switch easier when the rules apply
- Help you avoid missing deductions
- Reduce January Self Assessment stress
Examples of digital records:
- Sales invoices (PDF or photo)
- CIS deduction statements
- Bank statements
- Digital copies of receipts
Step 3: Send quarterly updates (not just year-end returns)
Under MTD for Income Tax Self Assessment (MTD for ITSA), you’ll send HMRC four updates per year, plus a final declaration.
Quarterly deadlines are expected to be:
| Period end | Update deadline |
|---|---|
| 5 July | 5 August |
| 5 October | 5 November |
| 5 January | 5 February |
| 5 April | 5 May |
Keeping up with quarterly updates means fewer last-minute surprises and more control over your tax bill.
Why get MTD-ready now?
- Avoid penalties for late filing when MTD starts
- Spread your tax work through the year instead of one stressful month
- Get a clearer picture of your profits and cash flow
For CIS workers and sole traders, getting organised early can also mean claiming all allowable expenses without hunting for lost receipts.
How Tax2u can help you go digital
We make MTD simple:
- Recommend and set up HMRC-approved software for you
- Help you keep accurate digital records
- Submit quarterly updates and your final declaration on time
Get MTD-ready with Tax2u – Stress-free, paperwork-light, and fully HMRC compliant.