We’re a couple of months into the new Making Tax Digital (MTD) rules now, with many taxpayers finding themselves using accounting software for the first time.
So for the 900,000 sole traders and landlords affected by the MTD for Income Tax Self Assessment (ITSA) changes in April 2026, they are being urged to think carefully about the software they choose.
What is Making Tax Digital?
MTD is part of a long-term government plan to modernise and bring the tax system closer to real time.
Eventually, all businesses will need to keep digital records using MTD compatible HMRC-approved software and then submit their figures every quarter.
Making Tax Digital Software
Due to HMRC’s MTD requirements, such as digital records, digital links and electronic submissions, the software you use must be MTD compatible and HMRC-approved.
The best MTD software includes the following features:
- Quarterly MTD submissions
- Bank feeds
- Receipt capture
- Accountant access
- VAT support
- Mobile app access
Take a look at our How to Choose the Right Software for Making Tax Digital article for further advice on this.
Choosing the Right MTD Software
The Association of Taxation Technicians (ATT) is urging taxpayers to think carefully and not just focus on cost when selecting software.
While free options are available, these may be limited – either in terms of how long they are offered for, or the functionality they provide.
Need help deciding between Limited or Umbrella? We are happy to help- give Sophie a call on 01442 795 100 or email sophie.lewis@dolanaccountancy.com
Jon Stride, chair of the ATT’s Technical Steering Group, explained, “MTD is a big change for taxpayers, requiring them to keep regular records and requiring quarterly submission of data. Software will be required for this, but not all products offer the same features, and not all will meet every taxpayer’s needs.
“Choosing purely on price may not be the best approach – taxpayers will need to ensure that the software they select is capable of handling all aspects of their reporting obligations under MTD. Equally, not everyone will require the full functionality of more advanced—and often more expensive—accounting packages. Some taxpayers, particularly those with simpler affairs, may find that a spreadsheet combined with bridging software is a more appropriate and cost-effective solution.
“HMRC provides a tool to help taxpayers identify compatible software options. However, even with this support, taxpayers may still need to carry out their own research, seek advice from peers or agents, and consult independent reviews to ensure they select a product that is right for their circumstances.”
Dolan Accountancy Making Tax Digital Packages
At Dolan, we offer all of our clients free access to FreeAgent, as it provides everything you need to successfully meet your MTD obligations.
Our MTD package includes everything you need and is just £25 +VAT per month.
If you’re an existing client, we charge an additional £10 + VAT per month to take care of your MTD needs.
For more help and advice, please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.
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