Making tax digital

What Is Making Tax Digital?

Making Tax Digital is an HMRC initiative designed to modernise the UK tax system. Instead of manual spreadsheets or paper-based processes, MTD requires businesses to keep digital financial records and submit tax information through MTD-compatible accounting software.

MTD aims to:

Reduce tax-return errors

Improve accuracy

Make tax submissions faster

Give businesses better real-time financial visibility

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Who Must Follow MTD in 2025?

1. VAT-Registered Businesses

All VAT-registered businesses—regardless of their turnover—must comply with MTD.

This means you must:

Maintain digital VAT records

Submit VAT returns through approved software

Keep a digital link audit trail

2. Self-Employed Individuals & Landlords

MTD for Income Tax is gradually rolling out. If your income exceeds HMRC’s threshold, you will need to:

Keep digital records

Submit quarterly updates

Use approved MTD-compatible software instead of relying solely on annual Self Assessment

SH’s Accounting & Bookkeeping Ltd can help you understand exactly when you’ll be required to join MTD and prepare for the transition early.

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Benefits of Making Tax Digital

Modernising your tax process brings several advantages:

✔ Fewer mistakes – Automated calculations help prevent human error

✔ More efficient – Submissions take minutes instead of hours

✔ Real-time financial insights – Know your business performance instantly

✔ Organised record-keeping – No more missing receipts or spreadsheets

✔ Seamless collaboration with your accountant

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MTD-Compatible Software We Support

At SH’s Accounting & Bookkeeping Ltd, we work with the leading MTD-approved software, including:

1. Xero

2. QuickBooks

3. FreeAgent

4. Zoho Books

5. Sage

6. VT Transactions+ (via bridging software)

We help you choose the right platform for your business size, goals, and budget.

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Why You Should Prepare Early

MTD requirements are expanding, and HMRC is moving toward a fully digital tax system. Getting ready now ensures:

1. You won’t face any penalties

2. Everything will be done on time.

3. No hassle no stress as there will be no risk of incorrect submissions.

4. The smoother transition for your bookkeeping.

Early preparation also gives your accountant (us!) the time to set up the right systems and streamline your records.

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How SH’s Accounting & Bookkeeping Ltd Can Help

We offer complete support to make your MTD journey easy and stress-free:

Our Services Include:

1. MTD-ready bookkeeping

2. Digital record-keeping setup

3. Accounting software setup & training

4. VAT submission through MTD software

5. Quarterly updates for MTD for Income Tax

6. Full MTD compliance management

Ongoing support for all sorts of small, medium sized businesses, sole traders & landlords

Why us?

💼 Because we provide Personal, friendly service

📊 We offer clear, accurate bookkeeping

🧾 Tailored MTD support for your business type

📱 Always easy to reach and ready to help

Get MTD-Ready Today

If you want expert guidance, software support, or complete digital bookkeeping, we’re here to help.

SH’s Accounting & Bookkeeping Ltd

📞 07962270599

🌐www.shsbookkeeping.co.uk

[email protected]