Making Tax Digital for Income Tax (MTD IT) is one of the biggest changes to hit UK tax administration in a generation — and for many small business owners and landlords across Surrey, the deadlines are already live or fast approaching. Whether you run a plumbing firm in Guildford, a consultancy in Woking, or let property in Reigate, this guide explains what you need to do right now.
What is Making Tax Digital for Income Tax?
MTD IT requires self-employed individuals and landlords to keep digital records and submit quarterly updates to HMRC using compatible software, rather than filing a single annual self-assessment return. It is part of HMRC's wider initiative to modernise the UK tax system.
Who does it affect and when?
- From April 2026: self-employed individuals and landlords with combined income above £50,000
- From April 2027: those with income above £30,000
- From April 2028: those with income above £20,000
If your qualifying income sits above the current threshold, you are already required to comply. If you are approaching a lower threshold, start preparing now — not the month before your deadline arrives.
What does compliance actually involve?
- Keep digital records of your income and expenses throughout the year
- Submit quarterly updates to HMRC (roughly every three months)
- Submit a final end-of-period statement and tax return at year end
The quarterly updates are summaries of income and expenditure, not full tax returns. However, they require compatible software, and the habit of recording transactions regularly is something many sole traders and landlords will need to build.
Which software do you need?
Popular HMRC-approved options widely used by Surrey businesses include Xero, QuickBooks, FreeAgent and Sage. The key is choosing a platform you will actually use consistently — cloud tools that link to your bank account make the process significantly easier. If you already use bookkeeping software, check that your current version is MTD-compatible.
What if you are not yet compliant?
If your income is above the £50,000 threshold and you have not yet registered or begun using compatible software, you may already be at risk of a penalty. HMRC has signalled a light-touch approach during the early months, but that window will not last indefinitely.
How we can help Surrey businesses
Our team has been helping businesses across Surrey, Kent and Sussex prepare for MTD IT well ahead of the deadlines. We can help you choose the right software, set up your digital records correctly, and handle your quarterly submissions and year-end filings.
Talk to us about your situation
Our chartered accountants work with small businesses, landlords and contractors across Surrey, Kent and Sussex. Get in touch for a free initial consultation.
