Making Tax Digital in Surrey: what to do before april 2026
At the Mole Valley Chamber weekly networking breakfast last week, members heard a timely and important presentation from Neil Jackson, Director of Your Finance Partner, about the impending Making Tax Digital (MTD) changes for income tax.
The message was clear: although many businesses know the 1 April 2026 deadline is approaching, far fewer have taken steps to prepare. Neil’s session highlighted why that gap could cost local businesses time, stress — and potentially penalties — if action isn’t taken soon.
Neil began by explaining that Making Tax Digital is much more than “filing online”. Launched by HMRC (the UK tax authority) as a multi-phase initiative to modernise tax administration, MTD has already transformed VAT reporting and is now being extended to income tax and self-assessment.
From 1 April 2026, most sole traders and landlords with turnover above £50,000 will be required to:
- Keep digital records
- Use HMRC-approved software
- Submit quarterly updates rather than one annual return
- Send a final declaration each year
These five submissions replace the current single self-assessment filing. Neil made it clear that digital records is not just an option — paper and spreadsheets alone won’t be compliant.
He pointed out that the threshold is based on turnover, not profit — a nuance that caught some attendees by surprise. This means many in the room need to check their 2025 figures now to see if they meet the criteria.
Making Tax Digital: Why this matters for Surrey businesses
The audience — made up of business owners and professionals across Mole Valley and Surrey — was reminded that:
- HMRC will expect quarterly submissions for affected taxpayers
- The new regime will require software that links to bank accounts
- Deadlines will come around quicker than many realise
Neil explained quarters will cover periods such as 6 April to 5 July, with each submission due 32 days after quarter end. For many used to annual accounts, this represented a significant shift in workflow.
He also highlighted that future phases of MTD are expected to extend to lower turnover bands — first £30,000 and then £20,000 — and potentially other types of business structures in years to come.
Don’t leave it until the last minute
One of Neil’s key themes was urgency. He shared that Surrey businesses should be taking steps now rather than waiting until the spring.
Many businesses have not yet selected their software or fully mapped their recording processes. Neil emphasised that starting early makes the transition smoother and allows businesses to benefit from digital tools ahead of the deadline.
He also pointed out some unexpected advantages of the digital approach, including:
- Automatic bank feeds that save time
- Real-time visibility on tax positions
- Remote collaboration with accountants
- Improved cash flow insights
These benefits, he noted, can help business owners plan rather than react.
Digital tool recommendations for making tax digital
To meet the new requirements, Neil outlined approved digital accounting systems suitable for small business and landlord records.
Recommended options included:
- Xero – popular cloud accounting platform with strong UK support
- FreeAgent – often free with certain bank accounts such as NatWest
- Sage – long-established accounting package
- QuickBooks – widely used and HMRC-compliant
The common factor, he stressed, is that whichever system is chosen must directly connect to your bank and be able to submit to HMRC.
Practical next steps
Neil left attendees with a simple checklist:
- Review your 2025 tax return to confirm whether you exceed the £50,000 threshold
- Open or separate your business bank account for clear records
- Choose your software and set it up well before April 2026
- Start recording digitally now, not later
The room agreed that with less than a year to go, action now would be far less stressful than trying to catch up at the last minute.
Find out more about Making Tax Digital in Surrey
If you would like personalised guidance on Making Tax Digital in Surrey — including which software will suit your business and how to implement digital record keeping — contact Neil Jackson at Your Finance Partner.
Neil works with businesses across Surrey, helping them prepare for MTD compliance with confidence. For friendly and professional support, reach out today and make sure your business is ready for April 2026.
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