MTD for Income Tax: how your accountant can help

Making Tax Digital for income tax (MTD ITSA) is a pressing reality that small business owners must prepare for. With HMRC’s income tax changes set to take effect in 2026, sole traders, landlords, and small business owners will need to adapt to new digital reporting requirements. Fortunately, you don’t have to navigate this alone. An accountant can support clients through every stage of the transition to ensure compliance, clarity, and confidence.

How an accountant help with MTD ITSA preparation

Provide tailored guidance on MTD requirements

Every business is unique, and so is its path to compliance under MTD for income tax. An accountant can help business owners understand how the rules apply to their specific situation, including which deadlines, income thresholds, and reporting obligations they need to meet.

To make these conversations as productive as possible, clients should come prepared with:

• A clear picture of their annual income and sources.
• Details of any existing accounting software or digital tools in use.
• An understanding of how they currently record and report income.
• Any concerns or questions about quarterly updates or the final declaration process.

By sharing this information, an accountant can offer tailored advice and ensure your business is ready for the transition.

How an accountant helps with regular MTD ITSA support

Support with digital record-keeping and software recommendations

One of the most significant shifts under MTD for income tax is the requirement to maintain digital records of income and expenses. This means saying goodbye to paper ledgers and manual spreadsheets, and moving towards HMRC-compliant software that can capture and categorise transactions in real-time.

An accountant can advise on the best digital tools for your business, helping you choose systems that integrate smoothly with your operations and meet MTD requirements. They’ll also guide you on how to structure your records so that quarterly updates and final declarations are accurate and stress-free.

Choosing the right MTD-compatible software is a crucial step in preparing for MTD ITSA. Numerous options are available, but an accountant can assess your specific needs — whether you're a sole trader, landlord, or small business owner — and recommend software that aligns with your processes and meets HMRC’s compliance standards.

To make the most of this support, you should begin transitioning now. Start by reviewing your current record-keeping methods and identifying areas that could be digitised. The sooner you make the switch, the easier it will be to stay compliant.

Shorts is an Xero Platinum partner, and its Genus team regularly does Xero implementations and offers Xero training, ensuring it works seamlessly with your existing processes. From initial configuration to ongoing training and support, the team can help you learn the new tools and make sure your digital records are accurate and up-to-date.

Quarterly submission management

Under MTD for income tax, submitting accurate and timely quarterly updates to HMRC is a key compliance requirement. These submissions summarise your income and expenses for each quarter and help HMRC maintain an updated view of your tax position. An accountant can ensure that each submission is prepared correctly, reflecting your financial activity and meeting the required deadlines.

To support this process, clients should:

• Keep their digital records up-to-date throughout the quarter
• Flag any unusual transactions or changes in income promptly
• Share access to relevant software or platforms used for record-keeping
• Communicate regularly to avoid last-minute surprises

By staying organised and proactive, you’ll improve the efficiency of the submissions process and avoid compliance issues.

Final declaration preparation

The final step in the MTD for income tax process is submitting the End of Period Statement (EOPS) and the Final Declaration. This is a comprehensive summary of your income for the tax year. This is where an accountant will ensure that all income sources are accurately reported, including any that may not have been captured in quarterly updates.

What’s more, an accountant will compile the necessary data, reconcile your digital records, and verify that everything aligns with HMRC’s requirements. Their expertise ensures that your submission is complete, correct, and compliant.

To support this process, clients should:

• Maintain clear and consistent records throughout the year
• Inform their accountant of any additional income streams, such as rental income or freelance work
• Review quarterly submissions for accuracy to avoid year-end discrepancies

How an accountant can futureproof your MTD ITSA operations

Proactive tax planning and advice

Beyond compliance, MTD for income tax opens the door to smarter, more proactive tax planning. With access to real-time financial data, an accountant can offer valuable insights that help reduce tax liabilities and optimise your financial position. By analysing your quarterly submissions and digital records, they can identify opportunities for savings, flag potential issues early, and ensure you're making informed decisions throughout the year.

This proactive approach also helps clients stay ahead of deadlines, avoid penalties, and maintain a clear view of their tax obligations. Your accountant can help you build a tailored tax strategy that not only meets HMRC’s requirements but also supports your long-term business goals.

Plan for MTD for income tax

MTD for income tax is a significant change, but a good accountant can support your business through planning, preparation, and peace of mind.

At Shorts, we’re committed to helping sole traders, landlords, and small business owners navigate the transition with confidence.

If you’re unsure where to start or want tailored advice for your situation, contact our Owner-Managed Business team or Genus team today.