Making Tax Digital with Smooth Accounting
Making Tax Digital (MTD) is changing how you manage tax. If you’re self-employed or earning property income, you’ll soon (if not already) need to keep digital records and submit regular updates to HMRC.
For many businesses and individuals, this can feel like a pretty big shift. New rules, new software, and a whole new reporting process… it can quickly become overwhelming.
If you’re unsure where to start, we get it.
That’s why, at Smooth Accounting, we help business owners navigate Making Tax Digital with confidence. We support you with choosing and setting up MTD software, maintaining compliant digital records, and managing quarterly reporting so you don’t have to worry about missing anything.
Contact us today to get started.
Who our Making Tax Digital accounting services are for
Our Making Tax Digital services are designed for self-employed individuals and landlords who need to stay compliant, without the stress.
We typically work with forward-thinking clients who want to make the most of what modern accounting has to offer. If you value clear advice and a smoother way of managing your tax, we’d be a good match.
Incredibly efficient and friendly. Such a modern look at accountancy and the speed and quality in which everything was dealt with was second to none. It’s a breath of fresh air to have an accountancy firm join the 21st century. This company is full of knowledge and extreme professionalism. Highly recommend them to everyone
– Simon R.
Income tax self-assessment for self-employed individuals
If you’re self-employed, MTD for income tax will change how you track and report your earnings.
Instead of submitting one annual tax return, you’ll move to a system of quarterly reporting. This means sending updates to HMRC every few months, followed by a final confirmation of your tax position at the end of the tax year.
For self-employed people, this brings both challenges and opportunities.
On one hand, there’s more frequent reporting. On the other, you get a clearer, real-time view of your income tax throughout the year, which can help you plan ahead and avoid surprises.
Income tax self-assessment for landlords
If you earn income from property, Making Tax Digital will also apply to you.
Landlords with qualifying income above the threshold will need to follow the same MTD rules, including digital record keeping, quarterly submissions, and the year-end submission.
This can be somewhat trickier to manage if you have multiple properties, different income sources, or if you share ownership of the property.
How our Making Tax Digital Accountants can help
Making Tax Digital is all about building a system that works for you. One that keeps your records organised, your reporting accurate, and your tax under control.
Here’s how we support you:
Compliant accounting software setup
Choosing the right MTD compatible software is essential. We are a Xero Platinum Partner, which means we’re qualified and highly recommend Xero cloud accounting software for Making Tax Digital. In fact, we trust Xero that much for our clients that we’re proud to be a Xero-only accounting firm. It’s easy to use, connects to HMRC, and is fully compatible with MTD requirements.
We’ll:
- Set up Xero correctly to work seamlessly with your business
- Make sure everything is digitally linked
- Integrate your income and expense tracking
- Show you how to use it confidently and take care of anything you need
Maintaining digital records
Making Tax Digital means no more spreadsheets or paper notes. It’s time to start storing your records digitally. Once we’ve set up your software, we’ll help you build a system that feels right for how you work and keeps everything compliant with HMRC. With the right setup, you not only stay compliant but also understand your business better.
We’ll:
- Organise your records so they’re up to date
- Create a record-keeping system that suits your working habits
- Give you full visibility over your income and expenses
Preparing and submitting quarterly updates
Quarterly updates are at the heart of MTD for income tax. Instead of one annual submission, you’ll need to submit quarterly updates throughout the tax year. These updates give HMRC a snapshot of your income and expenses for each reporting period. But we’ll take care of the entire process so you won’t need to worry about deadlines or errors.
We’ll:
- Prepare your quarterly updates
- Help you understand the data from previous quarters
- Ensure everything is accurate before submission
- Submit updates on your behalf
Completing the final declaration
At the end of the tax year, you’ll need to submit a final declaration. This end-of-year tax submission replaces the usual self-assessment tax return and confirms how much tax you owe or are owed. Because everything has already been tracked and reported throughout the year, this step becomes much more straightforward. You’re in safe hands with our accountants.
We’ll:
- Review all of your income from the year
- Make any necessary adjustments
- Finalise your income tax position
- Submit your final declaration to HMRC
Get MTD help and guidance from Smooth Accounting
If you’re unsure whether MTD applies to you, or you just want to get everything set up properly, we’re here to help. Call us today on 02392 982123 or contact us here to talk to our team, and we’ll gladly walk you through your options. Let’s help you decide what’s right for you.
Frequently asked questions about Making Tax Digital services
What happens if I don’t comply with Making Tax Digital for income tax?
If you don’t follow the MTD rules, HM Revenue & Customs can apply penalties, usually through a points-based system for late submissions. Simply put, the more deadlines you miss, the more penalty points you build up. Once you hit the limit, you’ll be charged a fine. But we help you avoid this by getting you set up correctly from the start with the right cloud software and reporting system that suits your work.
What are the late submission and late payment penalties?
Under MTD, late submission and late payment are treated separately. If you submit late, you’ll receive penalty points. These add up over time, and once you reach a certain level, you’ll get a fine. But if you pay late, you may be charged penalties and interest depending on how overdue the payment is.
We know it can sound a bit daunting, but with the right support, it’s very manageable. We’ll keep everything on track so you don’t have to worry about deadlines or unexpected charges.
Does MTD apply to corporation tax?
MTD currently applies to VAT-registered businesses as well as landlords and sole traders earning above the income tax MTD threshold. It does not apply to corporation tax. But it doesn’t hurt to keep your company taxes more organised. If you’d like help bringing your limited company accounting in line with the modern tax system, just get in touch.
