You might have heard about Making Tax Digital — or maybe HMRC’s letters are stacking up unopened. Either way, the rules are changing, and if you’re a sole trader or landlord, it’s going to affect you soon.
Here’s what it means in plain English, who it applies to, and how I’m helping clients across Cowal stay compliant without paying for software they don’t need.
What is Making Tax Digital?
Making Tax Digital (MTD) is HMRC’s move to bring the UK’s tax system fully online.
At the moment, most self-employed people and landlords submit a Self Assessment once a year. That’s about to change.
Under MTD, you’ll need to:
- Keep digital records of your income and expenses
- Submit quarterly updates to HMRC (yes, every 3 months)
- File a final statement at the end of the year
- Use approved MTD software to do it
This isn’t a voluntary change — it’s becoming mandatory.
Who does this apply to?
The rollout is happening in stages:
- April 2026: If you’re self-employed or a landlord and your total income is over £50,000, you’ll need to be fully MTD compliant
- April 2027: The threshold drops to £30,000
- More changes will likely follow — this is just the start
So if your business is ticking along steadily, you may already be in the first group, or close to it.
What does it mean in practice?
Let’s be honest — for most people, it means more admin.
Right now, many business owners gather up everything once a year and pass it to their accountant. Under MTD, that won’t cut it.
You’ll need to:
- Log things regularly, not annually
- Use compatible software (not paper, not spreadsheets)
- Submit information four times a year instead of one
- And make sure it’s done properly — because HMRC will be watching more closely
I’ve built something better — and it’s free for my clients
Most people assume MTD means signing up for QuickBooks, Xero, or another software subscription — at £12 to £20 per month.
But I think that’s an unnecessary expense for most small business owners. So I’ve built my own solution.
It’s called Squirrel — and it’s been designed to be:
- As easy to use as a spreadsheet
- Able to snap receipts on your phone
- Fully MTD compatible
- And most importantly — included free for all Cowal Accountants clients
If you already like using QuickBooks or Xero, that’s fine — I can work with those too. But if you’d rather avoid yet another monthly cost, Squirrel is a simpler, cleaner option.
No clunky interfaces. No trying to teach yourself bookkeeping.
Just an app that works — and support from someone who replies when you need help.
What should you do now?
If you’re not sure whether MTD applies to you yet — or you’re unsure how you’ll handle it — just drop me a message.
There’s no pressure to switch accountants. I’m happy to answer questions, explain things clearly, and point you in the right direction.
And if you do want to work with me, you’ll get:
- A local accountant you actually deal with directly
- Replies to your emails within 48 hours
- Year-round guidance — not just at tax time
- And free access to software that keeps you compliant without the stress
Making Tax Digital is coming — but with the right setup, it doesn’t need to be a problem.
And with Cowal Accountants, it won’t be.