Making Tax Digital (MTD) means HMRC expects digital records and returns sent from compatible software. Outsourced bookkeeping keeps those records current without a full-time hire.
Where MTD stands
- VAT: all VAT-registered businesses must keep digital records and file VAT returns through MTD-compatible software.
- Income Tax: sole traders and landlords join in stages based on qualifying income — from April 2026 for income over £50,000, April 2027 over £30,000, and April 2028 over £20,000 — with quarterly updates to HMRC.
VAT basics
- The VAT registration threshold is £90,000 of taxable turnover in a rolling 12 months.
- VAT returns and payments are due one month and seven days after the end of each VAT period.
What outsourced bookkeeping covers
- Recording sales, purchases and expenses in Xero, QuickBooks or Sage.
- Monthly bank and card reconciliations.
- VAT return workings each quarter, ready for you or your accountant to submit.
- Quarterly MTD Income Tax updates for sole traders and landlords in scope.
- Monthly management reports.
What to ask a provider
- Is your software MTD-compatible, and who submits returns?
- Who reviews the work, and what are their qualifications?
- How is my data protected, and where is it processed? (UK GDPR applies.)
- What is the monthly close date?
Get a proposal for your business.
Frequently asked questions
Yes. VAT-registered businesses must keep digital records and file through MTD-compatible software.
From April 2026 for sole traders and landlords with qualifying income over £50,000, with lower thresholds from 2027 and 2028.
