How does an accountant help with Making Tax Digital?

At Towerstone Accountants we provide specialist personal tax services, for self employed, and individuals across the UK. This article has been written to explain How does an accountant help with Making Tax Digital, in clear practical terms, so you understand how personal tax and Self Assessment rules apply in real situations. Our aim is to help you stay compliant, avoid costly mistakes, and make confident tax decisions.

Making Tax Digital is one of those changes that sounds straightforward in principle but causes a lot of uncertainty in practice. I speak to business owners, landlords, and self employed individuals every week who know they are supposed to be compliant but are not entirely sure what that actually means for them day to day. Others assume it is simply an online version of what they already do, only to find out later that the rules are more involved.

In this article, I want to explain clearly how an accountant helps with Making Tax Digital, what our role actually is, and why professional support has become more important rather than less since MTD was introduced. This is based on real world experience dealing with HMRC systems, software, deadlines, and the practical realities faced by people trying to run businesses alongside staying compliant.

What Making Tax Digital Is Really About

At its core, Making Tax Digital is HMRC’s long term plan to move the UK tax system away from annual, paper based reporting and towards digital records with more frequent updates.

At the moment, MTD applies to VAT registered businesses, and it is being rolled out in stages for Income Tax Self Assessment. Corporation Tax will follow later.

In practical terms, MTD requires that:

• Records are kept digitally
• Submissions are made through compatible software
• Data flows digitally from records to HMRC
• Manual rekeying is largely removed

This is not just a software change. It is a change in how HMRC expects information to be recorded, reviewed, and submitted.

From my experience, this distinction is where many people struggle. They focus on buying software but underestimate the process changes around it.

Helping You Understand Whether MTD Applies to You

One of the first ways an accountant helps is by clarifying whether Making Tax Digital actually applies to you and when.

Not everyone is affected at the same time. The rules differ depending on whether you are VAT registered, self employed, a landlord, or a limited company. Thresholds and start dates matter.

I regularly speak to people who think they are non compliant when they are not yet in scope, and others who should already be compliant but are not aware of it.

An accountant helps by:

• Confirming whether you fall within MTD rules
• Explaining which taxes are affected
• Clarifying start dates and transition periods
• Identifying any exemptions or deferrals

This alone often removes a lot of unnecessary worry.

Setting Up the Right Software Properly

Software is at the centre of Making Tax Digital, but choosing and setting it up correctly is not as simple as it sounds.

There are many MTD compatible systems, and what suits one business may be completely wrong for another. More importantly, poorly set up software can create inaccurate records that still technically comply with MTD but cause problems later.

An accountant helps by:

• Recommending suitable software based on your business
• Setting up the chart of accounts correctly
• Ensuring VAT and tax settings are accurate
• Linking bank feeds properly
• Making sure the software genuinely meets MTD requirements

From experience, I can say that fixing a bad setup later is far more time consuming than getting it right at the start.

Ensuring Digital Records Meet HMRC Standards

Making Tax Digital is not just about submitting figures digitally. HMRC has specific requirements around how records are kept.

Digital records must include certain information, such as dates, amounts, and categories, and there must be a clear digital link between records and submissions.

This is an area where many people unknowingly fall short. For example, using spreadsheets alongside software without proper digital links can break MTD rules.

An accountant helps ensure that:

• Records meet HMRC’s definition of digital
• Digital links are maintained correctly
• Manual workarounds do not create compliance issues
• Processes are documented and consistent

This reduces the risk of penalties if HMRC ever reviews your records.

Handling MTD Submissions Accurately and On Time

Under MTD, submissions are more frequent, especially for VAT and eventually Income Tax.

This increases the risk of missed deadlines, rushed figures, and errors being submitted simply to stay compliant.

An accountant helps by:

• Managing submission deadlines
• Reviewing figures before they are sent
• Ensuring adjustments are treated correctly
• Explaining what the submissions actually mean

I often find clients assume each submission is a tax bill. In reality, many MTD updates are just reporting obligations rather than payment demands. Having someone explain that context makes a big difference.

Dealing With Errors and Corrections Properly

Mistakes happen, especially during transitions to new systems.

Under Making Tax Digital, correcting errors is not always as simple as changing a number. There are specific rules around adjustments, disclosures, and audit trails.

An accountant helps by:

• Identifying errors quickly
• Correcting them in a compliant way
• Making sure audit trails are preserved
• Communicating with HMRC where needed

From my experience, handling errors properly often prevents them escalating into bigger issues.

Reducing Administrative Burden

One of HMRC’s stated aims with MTD is to reduce admin. In reality, for many small businesses, it initially increases it.

An accountant helps absorb much of that burden by taking responsibility for the technical side, allowing you to focus on running your business.

This includes:

• Interpreting HMRC guidance
• Keeping up with rule changes
• Managing software updates
• Ensuring ongoing compliance

Clients often tell me that the biggest benefit is not just accuracy, but mental space.

Advising Beyond Compliance

While Making Tax Digital is primarily about compliance, the data it generates can be useful.

An accountant can use digital records to provide better advice around cash flow, tax planning, and decision making. Regular digital reporting makes trends easier to spot and problems easier to address early.

From my perspective, this is where MTD can actually become a positive rather than a burden, but only if the data is reliable.

Supporting the Transition to Income Tax MTD

With Income Tax Self Assessment moving into the MTD framework, many sole traders and landlords are understandably nervous.

Quarterly updates, end of period statements, and final declarations represent a big shift from the traditional annual return.

An accountant helps by:

• Preparing clients for the change
• Setting up systems in advance
• Explaining how quarterly updates work
• Ensuring nothing is duplicated or missed

This transition phase is where professional guidance is particularly valuable.

Key takeaways

Making Tax Digital is not just a technical change, it is a behavioural one. It changes how records are kept, how often figures are reported, and how closely HMRC engages with taxpayers.

An accountant’s role is to translate those requirements into something workable, compliant, and as stress free as possible. From my experience, the people who struggle most with MTD are those who treat it as a box ticking exercise rather than a system that needs to be designed properly.

With the right support, Making Tax Digital does not have to be intimidating. It can become part of a smoother, clearer way of managing your tax position, but very few people want to navigate that shift alone.

You may also find our guidance on How do I register as self employed with HMRC, and self assessment guidance, helpful when reviewing related personal tax questions. For a broader overview of Self Assessment deadlines, reporting, and obligations, you can visit our self assessment guidance hub.