Making Tax Digital (MTD) is here to stay, and if you’re a CIS worker, sole trader, or self-employed individual, you may be wondering how to keep digital records for MTD without an accountant. The good news? You don’t need to hire a professional to stay compliant. With the right tools and some simple habits, you can manage your digital tax records confidently on your own.
What is Making Tax Digital (MTD)?
Making Tax Digital is a government initiative designed to make tax administration more efficient. Instead of paper records or manual spreadsheets, HMRC requires certain taxpayers to keep and submit their records digitally through approved software.
Currently, MTD applies to VAT-registered businesses, but it’s being rolled out to Income Tax Self Assessment (ITSA) for self-employed individuals and landlords. That means if you work for yourself, it’s time to prepare.
Why keep digital records without an accountant?
Hiring an accountant can be useful, but it isn’t always affordable especially for sole traders or CIS subcontractors. Fortunately, keeping digital records doesn’t need to be complicated. Managing your own records gives you:
- Cost savings – no monthly accountant fees
- Control and visibility over your income and expenses
- Less stress at year-end when your records are already in order
- Compliance with HMRC’s MTD rules without paying for extra help
How to keep digital records for MTD on your own
Here’s a step-by-step approach to staying compliant:
1. Choose MTD-compatible software
You’ll need HMRC-recognised software to store and submit your records. Popular options include:
- Free or low-cost apps like QuickBooks Self-Employed, FreeAgent (sometimes free via certain banks), or Sage Business Cloud
- Simple MTD bridging software if you want to keep using spreadsheets but still need digital submission capability
Tip: Check HMRC’s official list of compatible software before committing.
2. Record income and expenses in real time
Instead of waiting until the end of the tax year, log your income and expenses as they happen. This makes quarterly MTD updates easier. For example:
| Type of record | Example | How to record digitally |
|---|---|---|
| CIS income | Payments from contractors (minus CIS tax) | Enter into your chosen app with deduction details |
| Business expenses | Tools, materials, fuel, protective gear | Upload receipts using your phone’s camera |
| Other income sources | Side jobs, rental income | Add separate income streams in your software |
3. Store digital copies of receipts
Paper receipts fade or get lost. HMRC accepts digital copies, so simply snap a photo and upload it to your software. Most apps let you tag receipts to expenses automatically.
4. Reconcile bank transactions
If you link your business bank account, many apps automatically import transactions. This helps reduce errors and ensures everything adds up when HMRC checks your records.
5. Prepare for quarterly submissions
From April 2026, most self-employed people and landlords earning over £50,000 will need to send updates every quarter (with £30,000+ following in 2027). Practicing now means fewer surprises later.
Common mistakes to avoid
- Leaving everything until the deadline – this causes errors and penalties
- Mixing personal and business expenses – always use a separate bank account if possible
- Not checking software compatibility – HMRC will only accept submissions from approved providers
Final thoughts
Learning how to keep digital records for MTD without an accountant isn’t as daunting as it sounds. With the right software and a habit of recording income and expenses regularly, you can stay compliant, avoid penalties, and keep your tax affairs in order all without paying accountancy fees.
Need extra help?
At Tax2u, we make tax simple for self-employed people, CIS workers, and sole traders. Whether you’re looking for MTD-ready software, support with your Self Assessment, or guidance on maximising your tax refund, our team is here to help.
Get started with Tax2u today and make MTD stress-free.