HMRC is digitising the tax system. Making Tax Digital affects agency founders across VAT and income tax. Here we explain what is changing, when it applies, what software you need, and how to stay compliant without it disrupting how you run your agency.
Making Tax Digital for VAT has applied to all VAT-registered businesses since April 2022. If your agency is VAT registered, you must already be keeping digital records and submitting VAT returns through MTD-compatible software. Compatible options include Xero, QuickBooks, Sage and FreeAgent. Paper records and manual spreadsheet submissions (without bridging software) are no longer acceptable. If you are still using a non-MTD-compatible process, this needs to be addressed immediately, as HMRC can levy penalties for non-compliance.
MTD for Income Tax Self Assessment (MTD for ITSA) replaces the annual self assessment return with quarterly digital submissions. It applies to sole traders and landlords with qualifying income above £50,000 from April 2026, and above £30,000 from April 2027. If you are a limited company agency founder paying yourself primarily via salary and dividends, MTD for ITSA does not directly affect your company, but it may affect your personal tax reporting if you have additional self-employment or rental income above the threshold. Sole trader agency founders will be directly in scope.
The right accounting software depends on the size and complexity of your agency. Xero is the most widely used among growing agencies. It integrates well with payroll software, Dext (receipt capture), and project management tools. QuickBooks is a strong alternative and is often better value for smaller agencies. FreeAgent suits freelancers and very small agencies with simpler needs. All three are MTD-compatible for both VAT and the upcoming ITSA requirements. Whichever you choose, ensure your records are structured in a way that makes management reporting and tax preparation straightforward, not just compliance-ready.
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) starts in April 2026 for agencies turning over £50k+. Here's how to automate those quarterly updates yourself, without paying an accountant to key in numbers you already have.
If your agency accounting tool isn't MTD-compatible, bridging software is the workaround. It sits between your software and HMRC, sending the required data without you changing your whole system. Here is what you need to know before Making Tax Digital for Income Tax becomes mandatory.
Making Tax Digital for Income Tax (MTD ITSA) arrives in April 2026 for agency founders earning over £50k. Here is exactly how to structure your chart of accounts so your accounting software submits compliant quarterly updates to HMRC without manual workarounds or year-end scrambles.
Making Tax Digital for Income Tax (MTD for ITSA) requires agency founders to keep digital records of all income, including dividends. Here's exactly what you need to record, how to store it, and what happens if you don't.
Making Tax Digital (MTD) for Income Tax Self Assessment is coming. Agency founders with income over £50k must use MTD-compatible software from April 2026. Here is what you need to know and when to act.
Moving your agency from spreadsheets to MTD-compliant software is one of the most important finance decisions you'll make. This guide walks you through the practical steps to migrate historical data accurately, avoid common errors, and set up your books for Making Tax Digital.
If you miss an MTD filing deadline, HMRC issues a penalty. This guide explains the penalty structure for 2025/26, how to appeal if you have a reasonable excuse, and what to do next to keep your agency compliant.
Making Tax Digital for Income Tax is coming. But for agency founders running multiple projects and clients, standard bookkeeping software won't cut it. Here's what to look for when choosing MTD-compatible software that actually works with how your agency operates.
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is the biggest change to how agency founders report tax since self assessment was introduced. From April 2026, you’ll need to file quarterly updates through MTD-compatible software, not just a once-yearly return. Here’s exactly what it means for your agency.
From April 2026, Making Tax Digital for Income Tax (MTD ITSA) will apply to agency founders with self-employed income over £50k. If you take dividends from your agency but also do freelance work on the side, you have a mixed-income scenario that most MTD guides ignore. Here is what you need to know, and what to do now.
Making Tax Digital for Income Tax (MTD ITSA) brings a new penalty system for late filing and late payment. Agency founders need to understand the point-based regime, the fines, and how to avoid triggering them. This guide covers the specific rules for 2025/26 and beyond.
HMRC is rolling out Making Tax Digital for Income Tax (MTD ITSA) from April 2026. If you are an agency founder filing self-assessment, the penalty system has changed. Points-based fines, late payment interest, and escalating charges apply from day one of non-compliance.
If your agency has some income that's VAT registered and some that isn't, MTD creates a split reporting problem. Here's how to handle it.
Making Tax Digital for Income Tax is coming in April 2026. If you run an agency on Xero, you need compatible software that handles agency-specific reporting. Here are the integrations that actually work.
Making Tax Digital (MTD) for VAT is now mandatory for all VAT-registered businesses, including agencies. This guide covers what MTD means for your agency, the software you need, the deadlines, and how to avoid penalties. Whether you’re on standard or flat rate VAT, here’s your practical compliance checklist.
Making Tax Digital (MTD) is already mandatory for VAT. From April 2026, MTD for Income Tax Self Assessment (ITSA) arrives for agency founders earning over £50k. Here's what changes, what stays the same, and what you need to do now.
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) arrives in April 2026. If your agency turnover is over £50k, you must keep digital records and submit quarterly updates. Here's what to do now.
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