One of the biggest changes to the UK tax system in decades, Making Tax Digital is part of HMRC’s plan to modernise the UK tax system, with the aim of making it easier for businesses and individuals to keep track of their taxes. James Howard, Managing Partner of Sysum Howard Duggan accountants in Worcester, explores what impact this change could have on your business.
Making Tax Digital aims to do exactly that: drive businesses to move away from paper-based systems and require them instead to maintain digital records and submit their tax updates electronically. The aim of this change is to make the process more accurate, more efficient and less prone to error. But for many small business owners, sole traders and landlords, the shift can feel confusing – and even overwhelming – especially if crunching the numbers isn’t your favourite part of running a business.
The changes are being rolled out in three phases. For VAT returns, digitalisation is already in place. From April 2026, the next phase – Making Tax Digital for Income Tax Self-Assessment – will begin to take effect, starting with sole traders and landlords with income over £50,000. Those earning over £30,000 will follow in April 2027, with further rollouts expected later. One of the key changes is the frequency of reporting, which will involve one Self-Assessment tax return each January as well as quarterly updates, plus an end-of-period statement, all using approved digital software.
For many small businesses, this raises big questions:
· What software do I need?
· How do I keep digital records?
· What does ‘quarterly reporting’ actually look like?
· Will this mean more admin?
· How do I make sure I don’t fall foul of penalties?
That’s where Sysum Howard Duggan comes in. Our goal is to make your transition to Making Tax Digital simple, stress-free, and fully supported, so you can get on with what you do best: running your business. Preparing sooner rather than later will also help your business avoid last-minute stress and ensure you’re fully compliant when the new rules are enforced. By taking proactive steps today, you can smooth the transition, streamline your accounting processes, and avoid costly mistakes.
Making the Digital Shift Easy
Whether you currently keep your records on spreadsheets, in notebooks, on paper, or in a shoebox under the counter (we’ve seen it all!), Sysum Howard Duggan can help you move to digital record-keeping without disruption. We work with a range of HMRC-compliant software such as Xero, QuickBooks, and FreeAgent, and we’ll recommend the option that best suits your business, budget and day-to-day workflow.
Our team can:
- Set up your digital bookkeeping system
- Transfer your existing records
- Train you or your team on how to use the software
- Handle the quarterly submissions on your behalf
- Review your data throughout the year to keep you compliant and informed
You don’t need to become a tax expert; that’s our job.
Avoiding Penalties and Last-Minute Panics
Under Making Tax Digital, timely and accurate reporting becomes even more important. Quarterly updates mean you’ll have regular deadlines throughout the year, and missing them could lead to penalties. Sysum Howard Duggan can keep track of your deadlines, remind you of what we need, and ensure your submissions are made on time.
Because we’re reviewing your figures quarterly rather than once a year, clients often find they have far fewer surprises around tax bills – and more opportunities for tax planning as the year unfolds.
A Partner, Not Just a Processor
The good news is, Making Tax Digital isn’t just about compliance, it’s also an opportunity. With clearer, more up-to-date financial information, small businesses can make better decisions, monitor cash flow more effectively and plan with more confidence.
Sysum Howard Duggan doesn’t just file numbers. We act as your financial partner – or as we put it, a ‘virtual’ Finance Director – getting to know your business, helping you understand your figures, spotting new opportunities and keeping your business moving in the right direction.
Making Tax Digital is a big change, but with the right preparation and support, it doesn’t have to be overwhelming. If you’re unsure how Making Tax Digital will affect you — or simply want to get ahead before the rules change — we’re here to guide you every step of the way, helping you through the process, ensuring you stay compliant and on top of your tax obligations.
For a friendly, commitment-free introductory chat, contact Sysum Howard Duggan on 01905 622202 or visit www.shdco.co.uk
