Making Tax Digital (MTD) for Income Tax will be a change for sole traders and landlords (it’s a change for accountants too!) We can’t deny that MTD is often viewed with a sense of dread. The headlines are highlighting quarterly updates, new software, and more deadlines. It’s easy for business owners to focus on what feels like extra admin.
But when you strip it back, MTD also presents a genuine opportunity for sole traders and landlords to run stronger, more informed businesses.
In this blog, we explain why the changes could actually help you become a better business owner (rather than seeing MTD as a box-ticking exercise)
Quarterly updates encourage better financial habits
One of the biggest shifts under MTD is the move away from an annual touchpoint with your finances. Instead of reviewing your numbers once a year (often in a rush around the self-assessment deadline), quarterly updates mean you’ll need to engage with your income and expenses more regularly.
This isn’t a bad thing. In fact, checking in every three months helps you spot issues sooner, whether that’s rising costs, slower-than-expected income, or cashflow pressure building beneath the surface. Problems that might once have gone unnoticed for months can now be addressed early, while there’s still time to take action.
It’s important to remember that the quarterly returns you share will be summaries, and not as detailed as the annual return.
Understanding your numbers puts you in control
Many sole traders and landlords are great at what they do, but less confident when it comes to the financial side of the business. MTD encourages you to get closer to the numbers, which is something we are passionate about at Accounting Clarkes.
When you understand what’s happening financially, decision-making becomes easier. You can see which activities are profitable, where money is being wasted, and how changes in income might affect your future tax bill. Instead of reacting to surprises, you’re working with up-to-date information that allows you to plan with confidence.
This clarity is particularly valuable when it comes to budgeting for taxes. More regular updates mean fewer shocks and a clearer picture of what you’re likely to owe, helping you manage cashflow more effectively.
Use quarterly deadlines to build better business routines
A powerful way to make MTD work for you is to “habit stack” – linking quarterly submissions with other valuable financial reviews.
Each quarter, consider setting aside time to:
- Run or update a cashflow forecast
- Compare actual performance against your budget
- Review ad hoc spending and cancel unused or unnecessary subscriptions
- Look ahead to upcoming costs, including tax payments
All of these reports can easily be generated at the push of a button, as most accountancy software providers have pre-defined reports for you to look at and use.
By combining these activities, the quarterly deadline becomes more than just a submission date. It becomes a regular business health check that helps you stay organised, focused and proactive.
It’s time to rethink what MTD means for your business.
MTD for Income Tax isn’t just about compliance. We believe it’s an opportunity for better insight into your numbers, to build better habits and make better decisions. We want to see sole traders and landlords feel more in control of their finances and more confident about the future of their business.
If you’re unsure how to prepare for MTD or want support setting up systems that genuinely add value, the team at Accounting Clarkes are here to help. With the right approach, MTD could be a turning point for many businesses to grow from good to great.
