Making Tax Digital Is Coming — And UK Businesses Are Right to Be Concerned

Making Tax Digital is coming — and many UK businesses aren’t ready. As MTD expands, demand for accountants is rising fast, pushing fees up and reducing availability. Business owners who…

Making Tax Digital Is Coming — And UK Businesses Are Right to Be Concerned

Many business owners still believe Making Tax Digital (MTD) is something they can “deal with later”. That assumption could prove expensive.

As HMRC rolls out the next phase of Making Tax Digital, demand for professional accountants is rising quickly. Those who delay are increasingly likely to face higher fees, limited availability, and avoidable stress.

If you’re a sole trader, landlord, or business owner in North London, Hertfordshire, or the surrounding areas, acting early could save you both time and money.

Get MTD Advice Before Fees Increase

What Is Making Tax Digital (MTD)?

Making Tax Digital is HMRC’s programme to modernise the UK tax system by moving away from paper-based and manual processes and towards digital record-keeping and online reporting using approved software.

MTD already applies to VAT-registered businesses. The next major phase — Making Tax Digital for Income Tax (MTD ITSA) — will affect millions of sole traders and landlords.

When Does MTD for Income Tax Apply?

From 6 April 2026: If your total qualifying turnover from self-employment and/or property income exceeds £50,000
From 6 April 2027: Threshold reduces to £30,000
From 6 April 2028: Threshold reduces further to £20,000

These thresholds are based on total gross income (turnover) from self-employment and property combined — not profit.

What Will You Be Required to Do Under MTD?

If you fall within the scope of MTD for Income Tax, you will need to:

Keep digital records of your income and expenses
Use HMRC-approved MTD-compatible software
Submit quarterly updates for each business or property income source
Complete an End of Period Statement (EOPS) to finalise figures
Submit a Final Declaration confirming your total taxable income for the year

In other words, MTD does not replace year-end tax responsibilities — it adds regular reporting throughout the year plus an annual finalisation process.

Why Making Tax Digital Is Causing Worry

For many business owners and landlords, the concern goes beyond learning new software.

Quarterly updates mean:

More frequent deadlines
Less tolerance for disorganisation
Greater reliance on accurate, up-to-date records

Late or missed submissions fall under HMRC’s points-based penalty system, meaning repeated failures can result in financial penalties.

For those already focused on running a business, this represents a significant increase in administrative responsibility.

The Growing Pressure on Accountants

One major issue is often overlooked.

As MTD for Income Tax expands, millions more taxpayers will require ongoing professional accounting support at the same time.

Accountants are already experiencing:

Rising demand for MTD advice and onboarding
Increased software setup and training requests
More complex compliance workloads
Greater need for year-round client support

There will not be a sudden increase in the number of qualified accountants to meet this demand.

Why Accounting Fees Are Likely to Rise

As demand increases and capacity remains limited, accounting fees are expected to rise — particularly for businesses that delay preparation.

As MTD deadlines approach, many firms will:

Prioritise existing clients
Charge higher fees for late or urgent onboarding
Limit the number of new clients they accept
Increase fees for rushed MTD setup and compliance work

Businesses that leave it too late may face higher costs or reduced choice when seeking professional support.

What Happens If You Wait?

Delaying action could result in:

Higher ongoing accounting fees
Limited availability of experienced accountants
Rushed software decisions
Greater risk of errors and penalties
Increased stress as deadlines approach

When it comes to tax compliance, waiting rarely leads to better outcomes.

Secure an Accountant Before Demand Peaks

Why Acting Early Makes Sense

Preparing for Making Tax Digital early allows time to:

Choose the most suitable MTD-compliant software
Set up accurate digital records properly
Plan tax efficiently throughout the year
Avoid last-minute pressure and increased costs

Early preparation leads to smoother transitions and more predictable fees.

How AA&R Accountancy Can Help

At AA&R Accountancy, we support sole traders, landlords, and growing businesses across North London and Hertfordshire with clear, practical guidance on Making Tax Digital.

Our focus is not just compliance, but long-term clarity and control. We provide: