Making Tax Digital: What Shropshire Businesses Need to Know for 2026
Big changes are coming to the UK tax system, and if you’re self-employed or a landlord, it’s time to start preparing. At The Hollies Bookkeeping, we’re helping local businesses across Shropshire get ready for Making Tax Digital (MTD) for Income Tax—and here’s what you need to know.
When is Making Tax Digital coming into force?
MTD for Income Tax will be introduced in phases, starting from 6 April 2026. From this date, it will become mandatory for sole traders and landlords with a combined annual income of over £50,000 from self-employment and/or property.
The rules will then expand:
From April 2027: threshold drops to £30,000
From April 2028: expected to include those earning over £20,000
This means many more individuals and small businesses will be affected over the next few years.
What does MTD actually involve?
MTD is designed to modernise the tax system. Instead of filing one annual Self Assessment return, you’ll need to:
Keep digital records of income and expenses
Use MTD-compatible software
Submit quarterly updates to HMRC
Complete a final end-of-year submission
This represents a major shift from traditional bookkeeping methods, but it also offers better visibility of your finances throughout the year.
How can you get ready?
Getting prepared early will make the transition much smoother. Here are the key steps:
1. Check if you’re affected
Review your income from self-employment and property. If it exceeds £50,000, you’ll need to comply from April 2026.
2. Go digital
If you’re still using spreadsheets or paper records, now is the time to move to cloud accounting software. HMRC requires compatible software to submit your records.
3. Get organised
Ensure your records are up to date and accurate. Clean, consistent bookkeeping will make quarterly reporting far easier.
4. Speak to your bookkeeper
Working with a professional (like The Hollies Bookkeeping!) can help you choose the right software, stay compliant, and avoid unnecessary stress.
5. Consider signing up early
You can voluntarily join MTD before it becomes mandatory, giving you time to learn the system before deadlines apply.
Helpful links
For more information, visit:
HMRC MTD guidance: https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax
MTD overview: https://www.gov.uk/government/collections/making-tax-digital-for-income-tax
Final thoughts
Making Tax Digital is one of the biggest changes to the UK tax system in recent years. While it may feel daunting, with the right preparation and support, it can actually simplify your processes and give you better control over your finances.
If you’re unsure where to start, The Hollies Bookkeeping is here to help you every step of the way. If you need help navigating these changes, please contact us at by phone on 01743 790086, email info@holliesbookkeeping.co.uk, or visit www.holliesbookkeeping.co.uk.