One of the most common questions about Making Tax Digital is what records HMRC requires you to keep.
Under MTD for Income Tax, taxpayers must maintain digital records of income and expenses using compatible software.
This applies to sole traders and landlords with gross combined income over £50,000, from April 2026.
What records must be kept digitally?
HMRC requires taxpayers to record details such as:
- income received from business or property
- dates of transactions
- amounts received or spent
- categories of expenses.
These records must be kept in digital format within accounting software or compatible systems.
Can you still use spreadsheets?
Spreadsheets may still be used in some situations, but they must connect to HMRC through approved software.
Many businesses find dedicated accounting software easier for MTD compliance.
Why good record keeping matters
Accurate records will help you:
- submit quarterly updates correctly
- track profits during the year
- reduce errors in your tax reporting.
Good bookkeeping will become more important once quarterly reporting begins.
Please do get in touch if you would like help setting up MTD compliant record keeping systems.
Watch our video to understand Making Tax Digital record keeping requirements.
How ready are you for MTD?
Request a free MTD readiness check
Free MTD readiness call
We offer landlords and self-employed a free 15-minute Making Tax Digital readiness call.
This call will confirm:
- whether Making Tax Digital applies to you
- what you need to do next
- when you need to be ready
There is no obligation, so book your free call.
Complete the form or call us directly on 01635 555 666.
Independent advice. Clear next steps. No impact on your letting arrangements.
