Making Tax Digital for Income Tax Self‑Assessment involves a significant shift for landlords and sole traders, but understanding the typical mistakes early can make the digital transition much smoother.
To help, we’ve outlined some of the common issues our clients have been facing, and how to overcome them.
1. Waiting too long to get started
Switching to MTD isn’t instant; choosing software, setting it up, and learning how to use it all takes time. Acting late often leads to rushed submissions and unnecessary stress. Instead, try to get ahead now. This will give you time to get everything set up properly, and you’ll feel confident using your new system before the deadline. We can assist you with choosing the right software and getting you comfortable with it.
2. Sticking with tools that don’t meet MTD rules
Spreadsheets and older systems won’t satisfy HMRC’s new digital requirements. Approved software is essential, and modern cloud‑based options like Xero are far easier to keep compliant. Using the right platform from the start prevents issues later and keeps your records secure and organised; we can help you choose the best one for you and get you set up.
3. Blending personal and business transactions
Sharing one bank account for everything can create confusion and interrupts clean record‑keeping. Instead, using a dedicated business account can help you keep your income and expenses clear, reduce errors, and link neatly with your MTD software.
4. Missing your registration window
Some people simply forget to register for MTD when they first meet the criteria, or assume that it will happen automatically, causing avoidable compliance issues. Keeping track of your obligations ensures you’re signed up on time and prepared for digital reporting before deadlines approach.
5. Delaying record‑keeping until later
MTD requires regular digital updates, so saving receipts for months at a time no longer works. Get into the habit of logging items as you go, ideally using apps that capture receipts instantly to keep your records accurate and avoid last‑minute scrambles.
6. Expecting your accountant to handle every step
Although accountants can support submissions and keep everything on track, but you still need to maintain your digital records throughout the year. Clear communication and shared responsibility make the whole process far easier and ensure nothing gets missed.
How we support your move to MTD
- Approved software setup & training.
- Quarterly bookkeeping & submissions.
- Simple real‑time record‑keeping tools.
With the right setup and support, Making Tax Digital becomes far more manageable and far less overwhelming.
