What Kent business owners need to know about Making Tax Digital

Recently the friendly team at Adams Accountancy has been flooded with questions from worried local business owners about Making Tax Digital. Just last week, a local café owner told me she was losing sleep over it – so I thought it was time to write this guide and cut through all the confusion.

What is Making Tax Digital and why you should care

Making Tax Digital is HMRC’s initiative to make tax administration more effective, efficient, and easier for taxpayers through a fully digital tax system. For many small and medium businesses, this means saying goodbye to those old spreadsheets and manual records you might have been using for years. But don’t worry – while change can feel daunting, most of our local clients are realising that digital record-keeping saves them time, money and frustration once they’re up and running.

One of our clients – let’s call him John – runs a small plumbing business in Canterbury. He was absolutely dreading the switch to digital, convinced it would be a nightmare. Two months after we helped him set up QuickBooks, he called me to say he’d been doing his invoicing from his van between jobs. Sometimes the things we worry about most turn out to be blessings in disguise.

Digital record keeping – Which software options work best?

Let’s talk about practical solutions that are working well for our current clients. Whether you’re a local tradesperson, running a café, or managing a professional services firm, there are software options to suit your needs.

Look, we get it. When clients first come to us about MTD, they’re usually somewhere between mildly worried and totally panicked. ‘Michelle, I can barely turn on my computer!’ is something I hear at least once a week. But you know – if my 68-year-old client who runs the local flower shop can master this, trust me, you can too.

Popular choices like Xero, QuickBooks, and Sage offer different features and price points. Many of our smaller local businesses having great success with FreeAgent, while larger operations often benefit from Xero’s more comprehensive features. The key is finding software that matches your business style and doesn’t overcomplicate your finances.

Key deadlines and requirements for different businesses

Here’s what you need to know about the timeline (and no, it’s not as scary as you might think). If your business is VAT-registered with a taxable turnover above £85,000, you should already be using MTD for VAT.

For Income Tax Self-Assessment (ITSA), self-employed businesses and landlords with annual income over £50,000 will need to join MTD from April 2026, while those with income over £30,000 will follow from April 2027. We know dates can be confusing, so just reach out if you need clarity about your specific situation.

Common concerns we’re hearing from Kent business owners

‘What if I’m not tech-savvy?’ is probably the most common worry we hear from our clients. Here’s the truth – you don’t need to be a computer whiz to handle MTD. Many of our clients who were initially nervous are now confidently managing their digital records, often via mobile phone apps. Another frequent concern is cost – while there is some investment needed in software, the time you save and business insights you gain often outweigh the expense.

The hidden benefits that might surprise you

If you’re anything like our clients down in Whitstable and Herne Bay, you’re probably dealing with income that goes up and down like a yo-yo depending on the tourist season. One of our restaurant clients told me last week that being able to check his real-time cash flow on his phone has been a game-changer – especially during those quieter winter months.

I won’t pretend the switch to digital is always smooth sailing, but I’ve genuinely seen it make life easier for most of our clients. Plus, it means when you message me in a panic about your VAT return (we’ve all been there!), I can hop onto your accounts right away and sort things out.

Common MTD mistakes you should avoid

While helping numerous local businesses transition to MTD, we’ve spotted some common pitfalls you’ll want to avoid. One of the biggest is leaving the switch to digital too late – no one wants to make decisions under pressure from a looming deadline.

Another frequent issue is not keeping digital records consistently; remember, it’s not enough to just input everything at the end of the quarter. We’ve also seen businesses choose software that’s either too complex or too basic for their needs. Take time to find the right fit for your business size and type and ask your accountant for their advice – after all, we are the experts in this.

Getting started with MTD – your no-panic guide

First things first, let’s figure out when you actually need to get this sorted. The deadlines depend on your business size, and trust me, you don’t want to leave it to the last minute – we had a few clients do that with VAT and it wasn’t pretty!

Once you know the deadline, we’ll help you pick the right software. No point splashing out on all the bells and whistles if you just need something simple to track your day-to-day stuff. And yes, you’ll need a bit of training, but it’s nowhere near as complicated as it sounds. Most of our clients get the hang of it after a couple of hours. There’s always online resources from the software providers as well so you’ll soon get the hang of it and wonder why you left it so long to get started.

Making Tax Digital not Making Tax Difficult

HMRC offers online resources, but we find most of our clients prefer having someone local who understands their business personally. That’s why we offer one-to-one support to help you choose and set up your digital systems correctly from the start.

Want to discuss how MTD will affect your business?

If your head’s spinning a bit, don’t worry – that’s totally normal. Pop into our office in Bexley (the one just up from the Coach and Horses), and we can go through this properly over a cup of tea. We make the best brew this side of the Dartford Crossing.

Give us a call on  01322 250 001 and let’s make sure your business is ready for the digital tax future. No question is too simple, and we’re always happy to help!

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