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Looking For a Tax Advisor in London? Here Are 10 Things You Should Know About the New MTD Rules

  • Jun 25
  • 5 min read

If you’re running a business in London, you’re already used to things moving fast. Whether it's the morning rush at Canary Wharf or the constant evolution of the tech scene in Shoreditch, staying ahead of the curve is just part of the job. But there’s one big change coming down the tracks that isn’t about transport or tech: it’s about tax.

Making Tax Digital (MTD) is the government’s plan to move the UK tax system fully into the 21st century. While VAT-registered businesses have been dealing with it for a while, the rules are about to expand significantly. If you’re currently looking for a tax advisor in London, you need someone who isn't just good with numbers, but someone who is "MTD-ready."

Here are 10 things you absolutely need to know about the new MTD rules and how they’ll affect your London-based business or property portfolio.

1. The April 2026 Deadline is the Big One

For a few years, there’s been a lot of talk about MTD for Income Tax, but the dates kept moving. Now, the timeline is set. From 6 April 2026, Making Tax Digital for Income Tax Self Assessment (ITSA) becomes mandatory for many sole traders and landlords.

If you are a self-employed individual or a landlord with a combined qualifying income of over £50,000, you are in the first wave. This means you’ll need to be using compatible software to track your finances and report to HMRC by the time the 2026/27 tax year kicks off.

2. Quarterly Updates are Replacing the Annual Rush

We’ve all been there: spending a frantic weekend in January digging through old bank statements and receipts to finish a tax return. Under the new MTD rules, that "once-a-year" habit has to stop.

Instead of one annual Self Assessment return, you will be required to send quarterly updates to HMRC. These updates give a summary of your business income and expenses. This is why having a proactive tax advisor is so important; they can help ensure your books are kept up-to-date every three months, rather than just once a year.

A tax advisor meeting with a client in a modern London setting

3. Digital Record Keeping is No Longer Optional

The days of the "shoebox full of receipts" are officially numbered. To comply with MTD, you must keep digital records of all your business transactions. This doesn't just mean scanning them into a folder; it means using software that can store the data in a way that HMRC’s systems can read.

Whether you use a dedicated accounting platform or a spreadsheet linked to bridging software, the records must be digital from the start. If you’re searching for a tax advisor in London, ask them which digital tools they recommend for your specific industry.

4. The "Final Declaration" Replaces the Old Return

Even though you’re sending quarterly updates, you still need to "wrap up" the year. At the end of the tax year, you’ll submit an End of Period Statement (EOPS) for each business source, followed by a Final Declaration.

The Final Declaration is where you confirm your total income from all sources: including things like savings interest or dividends: and claim your final reliefs. It’s effectively the replacement for the traditional tax return, but it pulls much of its data from the digital records you’ve kept throughout the year.

5. MTD for VAT is Already the Standard

If your London business is VAT-registered, you should already be following MTD rules. Since April 2022, all VAT-registered businesses (regardless of turnover) have been required to use MTD-compatible software for their VAT returns.

The 2026 changes for Income Tax don't change the VAT rules, but they do mean that many businesses will now have two different MTD streams to manage. A good accountant will help you sync these processes so you aren't doing double the work.

6. You’ll Need MTD-Compatible Software

You can't just log into the HMRC website and type in your figures anymore (for most people). You must use compatible software that connects directly to HMRC via an API (Application Programming Interface).

There are two main routes:

  • Cloud Accounting Software: Platforms like Xero, QuickBooks, or FreeAgent.

  • Bridging Software: This allows you to keep using spreadsheets but "bridges" the gap to HMRC's portal.

In a tech-forward city like London, most advisors will push you toward cloud accounting because it allows for real-time collaboration.

A business owner using digital accounting software on a tablet

7. "Digital Links" are the Secret Sauce

HMRC is very specific about how data moves between different pieces of software. They require "digital links." This means you cannot manually copy and paste data from a spreadsheet into your tax software. The data must flow automatically or via a linked file.

If your current process involves a lot of "manual entry" or "typing things out again," your advisor will need to help you redesign your workflow to be MTD-compliant.

8. There are Limited Exemptions

While MTD is becoming the norm, HMRC does recognize that not everyone can go digital. Exemptions are available for those who are "digitally excluded." This might include:

  • People whose age, disability, or location makes it impossible to use digital tools.

  • People whose religious beliefs are incompatible with using computers.

However, the bar for exemption is high. Most London-based SMEs and landlords will find they are expected to comply.

9. London-Specific Challenges

London businesses often have complex setups: multiple rental properties, side hustles in the "gig economy," or international clients. Because MTD for Income Tax looks at your combined qualifying income (property + business), many people who think they are under the threshold might actually be over it.

For example, if you earn £30,000 from a consulting business and £25,000 from a rental flat in Fulham, your qualifying income is £55,000. You are in scope for April 2026.

10. Early Preparation Saves Money (and Stress)

The biggest mistake you can make is waiting until March 2026 to look for an advisor. The best accountants in London are already helping their clients transition. Moving to digital records now gives you time to iron out the kinks before HMRC starts checking.

At Accountant Search, we specialize in matching SME businesses and landlords with the perfect accounting partners. We know that finding someone who understands the London market and the technicalities of MTD is crucial for your peace of mind.

Close up of accounting tools and tax documents

Ready to find your MTD-ready accountant?

Navigating the shift to Making Tax Digital doesn't have to be a headache. Whether you're a freelancer in Shoreditch or a landlord with a portfolio across the city, the right tax advisor will make the transition seamless.

At Accountant Search, we take the guesswork out of the process. Tell us a bit about your business, and we’ll match you with local accountants who have the CIS expertise, VAT knowledge, and MTD experience you need to stay compliant and grow.

Don't wait for the deadline to catch you out. Start your search today and get your digital records in order before the April 2026 rush.

Author: Sam

 
 
 

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