Making Tax Digital

MTD-compliant online accounting software for keeping digital records and submitting tax returns directly to HMRC. Ridiculous fees not included.

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What is Making Tax Digital all about?

Making Tax Digital (MTD) aims to encourage businesses to manage their tax affairs online. To comply, you’ll need to keep digital records about your finances, and use special software to submit your tax returns.

There are different options available to help you comply with the rules. For example, you might keep your records on a spreadsheet and then use bridging software to transmit everything to HMRC, or you could use accounting software to meet all the requirements in one go.

Ignoring the big blue Pandle logo at the top of the page, our favourite all-in-one free MTD software is Pandle.

Does Making Tax Digital affect me?

Making Tax Digital rules are rolling out in stages rather than all at once, so not every business needs to worry about it just yet. The first stage, MTD for VAT, is already live. The timeline below shows what you can expect to happen and when.

BUT, before you scroll away in excitement; don’t leave it until the very last minute. The sooner you get everything in place, the easier the transition will be.

MTD TIMELINE

Important Making Tax Digital Dates

Making Tax Digital is still in the process of rolling out, so the precise details of some stages might not be available just yet. We’ll keep you posted though because we’re nice like that and it’s what our boss pays us for.

VAT

Making Tax Digital (MTD) becomes compulsory for all VAT registered businesses, starting from the first VAT period after 1st April 2022.

Points-based penalty system for MTD VAT

HMRC updates the existing penalty system for late VAT submissions and payments, and replaces it with a new points-based penalty system.

NEXT IMPORTANT DATE

Income Tax Self Assessment (ITSA)

Landlords and self-employed taxpayers whose annual business or property income is more than £50,000 must start using MTD for Income Tax Self Assessment (ITSA) from 6th April 2026. If you want to volunteer to start following Making Tax Digital rules for Income Tax earlier, you can.

Income Tax Self Assessment (ITSA) – Again

The income threshold for following MTD ITSA rules reduces to £30,000 for landlords and self-employed people.

To be confirmed

Corporation Tax

Making Tax Digital is still in the consultation stage for limited companies who pay Corporation Tax, with a launch date to be confirmed.

FREE MTD SOFTWARE

Get your small business ready for Making Tax Digital

Sign up for MTD with HMRC

Authorise Pandle to link your account

Submit your MTD compliant return

Preparing your business for Making Tax Digital probably isn’t high on your list of things to look forward to, but just think of the endorphins when you get to cross it off.

Remember to leave plenty of time to register for MTD – even if you’re already signed up to submit tax returns. Once registered, you’ll need to authorise your HMRC-recognised bookkeeping software to submit your returns.

Making Tax Digital for small businesses

MTD Accounting Software

Digital record keeping with fewer errors

Spend hours on time-consuming tasks like entering transactions? Sounds like a great opportunity for bored brains to get distracted. Automate your financial admin to save time and minimise typos. All whilst Pandle cross-checks information and flags potential issues for you to review.

See your tax bill without any nasty surprises

Choosing between a surprise city break or an unexpectedly huge tax bill? We’d be packing a bag, too. Pandle uses your digital bookkeeping records to automatically calculate what you owe in real time, so you always know what to expect. Now, do we need our passport?

Instant support from real bookkeepers

We all need a bit of help from time-to-time. Talk to our Live Chat team of trained bookkeepers, take product tours to learn more about using Pandle, download guides, browse our blog, or search the Help Centre. It might not be very exciting, but we’ll jolly well help you find answers.

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Backing businesses of all shapes and sizes

Join over 90,000 users currently benefiting from our easy to use, intuitive bookkeeping software.

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We are accountants who recommend Pandle

We are accountants and we found Pandle when we were looking for a package to recommend to our clients. It is easy for them and easy for us to prepare their accounts and tax returns.

Pandle support is excellent, it does what it says it does and it is very reasonably priced.

Alan Reed Consultancy

Brilliant accounting software

I recommend Pandle to anyone who asks for invoicing software. Simple to use, intuitive and the support is quick and efficient. Recently had some queries that were quickly answered by James and Henry.

Karolina

Awesome experience

Awesome experience, customer support is great, interface is simple and intuitive whilst being powerful enough for everything you might need, whilst keeping the stuff you don’t out of sight. Truly the first accounting software I’ve used and actually got on with…oh and did I mention the supports great!

Sam

MTD FOR ACCOUNTANTS AND BOOKKEEPERS

Preparing your clients for Making Tax Digital

Transfer clients to Pandle easily

Manage all your clients from your free partner account

Submit tax returns directly to HMRC

Help clients manage Making Tax Digital with less stress – for both of you. Keep MTD-compliant digital records and submit tax returns directly to HMRC. Much easier than emotional phone calls on deadline day.

MTD SOFTWARE FOR ACCOUNTANTS

Managing the switch to MTD

No more tax deadline jump scares

Connect bank feeds and create custom rules to categorise transactions, allocate payments, and assign tax codes as the entries roll in. Pandle updates your clients’ tax liability estimate in real time so they know what to expect. Sometimes spoilers aren’t so bad.

Fewer errors for you to spend time fixing

Lock transactions to protect them from accidental edits. Amend multiple entries in one go rather than one at a time. Hundreds of real-time warning notifications and preventative measures help clients minimise errors. Leaving less to fix before completing their accounts.

Collaborate with colleagues and clients

Add multiple users. Edit permissions to manage what they can see and do. Add an unlimited number of clients to a single account, without being charged extra. Work on the same page, simultaneously. Add reminders or attach notes anywhere you need to. Enjoy your silent phone.

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Making Tax Digital

FAQs

  • How do I prepare my business for Making Tax Digital?

    Businesses registering for VAT for the first time will be enrolled into Making Tax Digital for VAT automatically.

    To join Making Tax Digital for Income Tax Self Assessment (MTD ITSA) you’ll need to sign up with HMRC, even if you’re already registered for Self Assessment.

    Once set up, the next step is to sign in to your HMRC-recognised bookkeeping software and authorise the link to your account.

  • Is there free accounting software for Making Tax Digital?

    Yes! And there are lots of options available (although obviously we’re going to say Pandle is our favourite).

    Although we do offer a paid version (Pandle Pro), this is just to give you the choice of automating more of your daily bookkeeping tasks. You can still use the free plan to create MTD-compliant records and submit returns directly to HMRC.

  • Will I need bridging software if I use Pandle for MTD?

    No, you won’t need to use additional bridging software to send your tax submissions if you use Pandle. You can use the software to comply with both the digital record-keeping requirements and submitting your return electronically.

  • Will I have to pay if I use Pandle with MTD clients?

    Nope! Being a Pandle Partner doesn’t cost you anything. Your clients will also receive an exclusive discount for Pandle Pro – 50% off.

  • How do I manage multiple MTD clients using Pandle software?

    Your free Pandle Partner account lets you switch between clients without needing to log in and out (or remember loads of logins). Switch to whichever client you’re working on, and get stuck in.

  • Are there training resources I can provide to my clients?

    Our Help Centre and blog both have stacks of guides, articles, and product tours to help clients find their way around.

    As Pandle Pro users your clients will also have unlimited access to our Live Chat support team of trained bookkeepers, so they’ll be able to ask for help in a way which won’t cause problems for you as their accountant!

Get started with Pandle

Create your account today, and decide what to do with all the extra time you get back. We hear Pilates is popular.

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Keep your data safe and secure

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Pandle is an agent of Plaid Financial Ltd., an authorised payment institution regulated by the Financial Conduct Authority under the Payment Services Regulations 2017 (Firm Reference Number: 804718). Plaid provides you with regulated account information services through Pandle as its agent.