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 ...
		Sage 50 Accounts update brings making tax digital changes A new Sage 50 Accounts update is coming, with version 34.1 introducing changes to align the software with current UK and Irish requirements. For businesses, accountants and bookkeepers, one of the update's most important area...
		Building Your Bookkeeping Business in 2026 The usual question I see asked in bookkeeping groups and forums is, where can I find customers, or how can I get experience now that I have passed my bookkeeping exams and started my bookkeeping business ......
		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...
		Making Tax Digital registration: Why you should act before HMRC does If you are required to use Making Tax Digital for Income Tax but haven't yet registered, my advice is simple: don't wait for HMRC to do it for you. Taking control of your Making Tax Digital registration now gives you the oppo...
		I've passed my Xero level 2 certification for another year While I'm certainly going to allow myself a little celebration, maintaining Xero certification for bookkeepers is about much more than having another certificate to display. For me, it's about demonstrating that the knowledge...
		Xero Classic Expenses is being retired in 2027 If your business still uses Xero Classic Expenses, there is an important change coming that is worth preparing for sooner rather than later. Xero has confirmed that its Classic Expenses feature will be retired in early 2027, ...
		MTD For Self Assessment: Don't panic if you missed the first deadline If you've recently discovered that the first Making Tax Digital (MTD) for Income Tax quarterly submission deadline has passed, don't panic. The first deadline, August 7, has passed, but there are currently no late-filing pena...
		Bookkeeping Buddy: Why DIY Bookkeeping Doesn't Mean Doing It Alone Many small business owners attempt DIY bookkeeping to save costs and maintain control. Yet, this path can be daunting. Learn how you can manage your finances more effectively with my Bookkeeping Buddy subscription, ensuring y...

Other bloggers you may like ...
		Why adult children worry about parents who live alone Posted by Steffi Lewis on https://www.yourping.uk When parents reach a stage where they're happily living on their own, it can be a source of pride for the whole family. They're independent, capable, ...
		Long-stay accommodation in Milton Keynes: Make yourself comfortable Posted by Emily Freeman on https://blog.shortstay-mk.co.uk If you are staying away from home for a night or two, a hotel room can be perfectly adequate. But when a trip stretches into a week, several weeks, or ...
		How to prepare for a career change after burnout Posted by Dave Cordle on https://blog.davecordle.co.uk Burnout doesn't always mean you need to change careers. Sometimes reducing your workload, setting clearer boundaries, or even changing how you work ca ...
		UK business growth needs certainty, not just good intentions Posted by Roger Eddowes on https://blog.essendonaccounts.co.uk There has been plenty of discussion about UK business growth recently, and the Chancellor has now given us some indication of the direction the Govern ...