With Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) coming into full force by April 2026, businesses and self-employed individuals across Swinton, Salford, and beyond must adapt to the realities of digital tax compliance. One of the most critical components in preparing for MTD is implementing effective digital bookkeeping practices.
In this guide, Co-gency Chartered Accountants explores the importance of digital bookkeeping under MTD, provides actionable tools and tips, and highlights how professional support ensures full compliance.
What Is Making Tax Digital (MTD)?
Making Tax Digital is an HMRC initiative aimed at transforming the UK tax system by making it more effective, efficient, and easier for taxpayers to get their tax right. Under MTD for ITSA, self-employed individuals and landlords with income over £50,000 will be required to:
- Maintain digital records of income and expenses
- Submit quarterly updates to HMRC via MTD-compatible software
- Submit an End of Period Statement (EOPS) and Final Declaration annually
This new process represents a significant shift from traditional annual tax returns and underscores the importance of real-time digital financial management.
Learn more from HMRC’s official guidance on MTD: Making Tax Digital for Income Tax
Why Digital Bookkeeping Is No Longer Optional
Digital bookkeeping is the foundation for MTD compliance. It enables businesses and individuals to:
- Track financial data in real time
With real-time insights, business owners can make informed decisions faster and avoid surprises at year-end. - Reduce manual errors
Digital record-keeping tools eliminate the common mistakes associated with spreadsheets and handwritten ledgers. - Stay compliant with HMRC
MTD mandates the use of functional compatible software. Paper records and manually completed spreadsheets will no longer suffice for affected taxpayers. - Enhance business visibility
Modern bookkeeping software often comes with dashboards, reporting tools, and integration with bank feeds, helping you visualise performance.
At Co-gency Chartered Accountants, we offer tailored tax and digital compliance support for clients in Swinton, Salford, and Greater Manchester. See our services
Tools to Help You Stay Compliant with MTD
To meet MTD obligations efficiently, selecting the right software is essential. HMRC maintains a list of recognised MTD-compatible software.
Popular options include:
- Xero
Cloud-based software ideal for small businesses with automation and reporting features. - QuickBooks
User-friendly software with robust MTD functionality and mobile capabilities. - FreeAgent
Tailored for freelancers and small businesses with built-in tax and project management tools. - Sage
Trusted by established businesses, especially those needing advanced payroll and inventory features.
We can help you select and implement the right software, ensuring it integrates seamlessly with your business operations.
Tips for Streamlining Digital Bookkeeping
Transitioning to digital bookkeeping doesn’t have to be daunting. Here are practical tips to get started:
- Start Early
Preparing well ahead of the MTD deadline gives you time to adapt systems and habits gradually. - Automate Where Possible
Use bank feeds, recurring invoices, and automated categorisation features to reduce manual work. - Stay Organised
Ensure all income and expense data is categorised properly for smooth quarterly submissions. - Schedule Quarterly Reviews
Set time aside every three months to review your records and address any discrepancies before submissions. - Consult with an Accountant/Tax Advisor
An expert can help ensure your digital records meet HMRC’s standards and support broader tax planning strategies.
Need guidance with your MTD obligations? Get in touch with our team
Why Work with Co-gency Chartered Accountants?
At Co-gency, we understand that transitioning to MTD isn’t just about compliance—it’s about making your business more efficient and future-ready. Based in Swinton and Salford, we offer:
- Bespoke digital bookkeeping support
- Guidance on choosing and setting up MTD software
- Quarterly reviews and tax planning assistance
- Peace of mind that your submissions are accurate and timel
Whether you’re a sole trader, landlord, or small business owner, our team can provide a complete solution for digital compliance and business growth.
Conclusion
MTD for ITSA marks a pivotal moment for UK taxpayers. Embracing digital bookkeeping now means you can comply with confidence and take advantage of improved financial clarity. At Co-gency Chartered Accountants, we’re here to support Swinton and Salford clients through every stage of this digital transformation.
To learn more or book a consultation, contact us today.