Making Tax Digital Checklist 2026

Your Guide to a Stress-Free Transition 👋

In the world of small business, tax isn’t usually the most exciting topic. But with big changes coming to how we report income, it’s one you can’t afford to ignore!

HMRC is introducing Making Tax Digital (MTD) for Income Tax starting in April 2026. For many of us DIY-ing our own accounts, this shift from an annual return to quarterly updates can feel like a lot to take in.

But don’t worry, we’re here to help! We’ve created a Making Tax Digital checklist 2026 so you can get ahead of the game, stay compliant, and keep your focus on growing your business 😊

Let’s dive into the steps you need to take and how to make the transition smooth 👇

1. Check Your Income Threshold

The Mistake: Assuming MTD doesn’t apply to you yet.

Fix It: Check your gross income (total sales) from the 2024/25 tax year. If it’s over £50,000, you are in the first wave for April 2026. If it’s over £30,000, you have until April 2027. Knowing your date is the first step to staying calm!

2. Ditch the Manual Spreadsheets

The Mistake: Relying on paper ledgers or basic spreadsheets that don’t connect to HMRC.

Fix It: MTD requires “digital links.” Start looking for MTD-compatible software now. Tools like Xero, QuickBooks, or FreeAgent are great options that do the heavy lifting for you.

3. Stop the “January Scramble”

The Mistake: Waiting until the end of the year to organise your receipts.

Fix It: Under MTD, you’ll send updates every three months. Start a habit of logging your expenses weekly. Not only does this keep HMRC happy, but it also gives you a real-time view of your profit! 📈

4. Separate Your Bank Accounts

The Mistake: Mixing personal spending with business transactions in one account.

Fix It: If you haven’t already, open a dedicated business bank account. It makes digital record-keeping faster because you won’t have to filter out your weekly grocery shop from your business expenses!

5. Snap Your Receipts on the Go

The Mistake: Losing physical receipts or letting them fade in a shoebox.

Fix It: Use an app (like Hubdoc or Dext) to snap a photo of your receipts the second you get them. Most accounting software includes this for free, and it means your digital records are always backed up. ✨

6. Understand the “Quarterly Update”

The Mistake: Thinking you have to do a full tax return four times a year.

Fix It: Don’t panic! A quarterly update is just a summary of your totals, not a full audit. Your software will usually generate this for you with a few clicks.

7. Check Your “Digital Links”

The Mistake: Copying and pasting data between different software or spreadsheets.

Fix It: HMRC wants data to flow digitally. Ensure your setup doesn’t rely on “manual intervention” (like re-typing numbers). If you use a spreadsheet, you’ll need “bridging software” to send the data safely.

8. Chat with a Professional Early

The Mistake: Waiting until March 2026 to ask an accountant for help.

Fix It: Accountants will be very busy when the deadline hits! Book a chat now or connect with a Digital Boost mentor to discuss which software fits your business best. 

Ready to Master Your Taxes?

Many of these steps are quick wins you can start today! We recommend starting with your software choice first – once that’s in place, the rest of the checklist becomes much easier to manage. Once you’ve completed these steps, you’ll be MTD-ready and ahead of the curve! 💪