First MTD for Income Tax submissions: Early lessons from the front lines

CREATED BY ALISON MEAD Published: 27/07/2026 @ 09:01AM #MakingTaxDigital #IncomeTax #SelfEmployed #Landlords #QuarterlySubmissions

Making Tax Digital for Income Tax is now becoming a reality for many self-employed individuals and landlords. Bookkeepers across the country are beginning to complete their first quarterly submissions ...

MTD for Income Tax submissions is already providing valuable insights as we navigate the early stages of implementation

While new systems often bring a degree of uncertainty, the early signs suggest that, with the right preparation, the process can be far smoother than many expected. A recent first-time submission highlighted just how important good bookkeeping habits are.

The client had both self-employment income and rental property
income, meaning separate submissions were required!

Using Xero tracking categories to distinguish the rental activity from the trading business made the process much easier. Once the income streams had been correctly identified, the software was able to produce the figures needed for each submission without unnecessary complication.

Before submitting anything, it was important to confirm a few key settings. The client needed to decide whether their records should follow the cash basis or the accrual basis of accounting, and it was also necessary to confirm the accounting period they used.

These decisions directly affect the information submitted, so taking the time to verify them beforehand avoids problems later.

One particularly useful step was running a Profit & Loss report split by tracking category. This provided a simple way to sense-check the figures before submission and quickly revealed that one property-related transaction had been posted without the correct tracking category. Correcting the error took only a few moments, demonstrating how valuable a final review can be before pressing submit.

Another welcome feature of the MTD software was the ability to drill down from the summary figures to the individual transactions that made up each total. Having this level of visibility makes it much easier to understand exactly what is being reported and provides reassurance that the figures are accurate.

The only real difficulty encountered was
with HMRC login credentials!

In this case, the client had initially been connected to the wrong HMRC account, which delayed the process until the issue was resolved. As more businesses move across to Making Tax Digital, ensuring that both clients and agents have the correct HMRC accounts linked is likely to become one of the biggest practical challenges.

Overall, the experience was encouraging. With bookkeeping records kept up to date, software configured correctly, and a few simple checks carried out before submission, the process proved to be straightforward.

As more bookkeepers complete their first submissions, sharing practical experiences and lessons learned will help the whole profession build confidence and make future quarterly updates even smoother.

If you are a bookkeeper or a business owner doing your own bookkeeping and you feel like there is no one you can go to for support, then the Bookkeeping Buddy is here to help. Wouldn't it be fantastic to have me to chat to or ask for help from whenever you get stuck?

Until next time ...

ALISON MEAD
I'm your Bookkeeping Buddy: Discover more by clicking here!

Share the blog love ...

Buffer Facebook Twitter Linkedin Pinterest WhatsApp #MakingTaxDigital #IncomeTax #SelfEmployed #Landlords #QuarterlySubmissions

About Alison Mead ...
Alison loves bookkeeping and supporting bookkeepers. She has been helping clients to be better bookkeepers in Sage 50 for over 24 years and has been Xero Accredited in accounts and payroll for a number of years too. She specialises in a very unique hand-holding method of training, helping bookkeepers and business owners to use their accounts software as and when they need support in setting up and producing their invoices, reports and financial information. Alison combines her role at Silicon Bullet with her Forever Living network marketing businesses and is often to be seen at business networking meetings as she likes to keep busy. You know what they say: if you want something done well ask a busy person!

More blog posts for you to enjoy ...
		Building A Bookkeeping Business: Increasing Your Prices You may have already done the difficult part of starting your own bookkeeping business; you've found clients, you've decided on your pricing, and now you're getting on with the day-to-day of looking after the clients you've ....
		Getting your sole trader clients ready for MTD For Income Tax If you're a bookkeeper supporting sole trader clients, you've likely already started receiving questions about Making Tax Digital (MTD) for Income Tax. While the changes may seem daunting at first, they're really about encour...
		Some great reviews for my Bookkeeping Buddy subscription Do It Yourself bookkeeping often feels like a chore when you're managing your own business accounts or even just starting off as a bookkeeper. This is why I created my Bookkeeping Buddy subscription and I'm getting some great...
		Xero pricing update from 1st September 2026 As bookkeepers, we are often the first port of call when clients hear about software price increases. If you've started hearing questions about Xero's latest pricing changes, now is a great opportunity to demonstrate your val...
		Why Should You Use A Bookkeeper? Keeping track of your accounts is a science as well as an art form. Yes, of course you can do it yourself, but wouldn't a bookkeeper make your life a whole lot easier? Having a clear picture of your finances at any given time...
		Bookkeepers: how you can prepare your landlord clients for Making Tax Digital Making Tax Digital (MTD) for Income Tax is no longer a future consideration for landlords. The rollout is now underway, and many landlords will need to change how they keep records and report income to HMRC ......
		Bookkeepers: About the summer 2026 temporary VAT reduction to 5% For many bookkeepers, managing VAT changes can feel like a full-time job, especially when temporary measures are introduced at short notice. The government's announced summer VAT reduction to 5% is one such change, and it is ...
		HMRC's new 55p mileage rate highlights the importance of good bookkeeping HMRC's move to raise the Approved Mileage Allowance Payment (AMAP) rate to 55p per mile is good news for many business owners and employees. As fuel, insurance, servicing, and vehicle costs continue to rise, this update offer...

Other bloggers you may like ...
		Why did I create YourPING? Well, it's simple really: fear ... Posted by Steffi Lewis on https://www.yourping.uk I live alone, work from home and have a fairly small circle of close friends. They are wonderful people, and I know they would absolutely be there for ...
		Are you thinking of employing young workers this summer? Posted by Roger Eddowes on https://blog.essendonaccounts.co.uk The summer holidays are a popular time for young people to gain their first work experience, and many businesses welcome the extra help during their b ...
		From idea to publication: How sBlogIt! creates your content for you Posted by Steffi Lewis on https://www.sblogit.com If blogging continues to fall further down your to-do list, you're not alone. Running a business always demands priority, and turning ideas into consi ...
		The art of outsourcing your visibility so you can get on with running your business Posted by Jacky Sherman on https://www.jackysherman.com After years of working as a coach, mentor, and referral marketing specialist, one of the most common conversations I've had with my clients has been a ...