MTD and the Top Software Solutions to Help You Comply

The date for Making Tax Digital (MTD) for Income Tax Self-Assessment may have recently been pushed back to April 2026, so rather than think it will be delayed again, it makes sense to prepare now and implement changes that will only benefit your business in the long run.  

MTD has been developed to improve accuracy of tax returns, reduce administrative burdens and increase efficiency. One of the key elements of MTD is using appropriate software solutions compatible with HMRC.

Here, we look at two of the popular software solutions that can help you comply with MTD for Income Tax Self-assessment.

MTD compatible software

Xero: Xero is a cloud-based accounting software that allows businesses to manage their finances online. Xero is already compliant with MTD, meaning that businesses using the software will be able to submit their quarterly reports to HMRC without any additional work. There are over 1,000 apps that integrate seamlessly with Xero, whether you need retail or stock solutions, point of sale to CRM solutions, there’s an app for you that will make your life easier.

QuickBooks: QuickBooks is another cloud-based accounting solution that offers similar functionality to Xero. QuickBooks also offers a range of other features such as invoicing and payroll, making it a comprehensive solution for small businesses. Like Xero, QuickBooks is already compliant with MTD.

The benefits of cloud-based bookkeeping software

Cloud-based bookkeeping saves business owners time in raising invoices and recording expenses. Here is a brief overview of the benefits:

• Record your bills and expenses, create sales invoices and record all your bank transactions efficiently through automatic bank feeds.
• Ease of access to current financials allows you to forecast figures and measure the actuals against your budgets.
• Manage potential issues before they arise with easy access to cash-flow reports.
• You can connect software such as Xero to Stripe, Paypal, GoCardless and others to make it easier for customers to pay you.
• You can ensure you’re paying on time, schedule batch payments and automate BACS payments, saving you the time in inputting the figures to your bank.
• Software such as Xero acts as your online filing system, helping you reduce your storage costs elsewhere and move towards paperless records.

Software migration with minimal disruptions

We can help advise on software and cloud options to operate your bookkeeping and compliance for MTD more efficiently.

In fact, we’re certified in Xero Migration and we can help you migrate onto the latest Xero software with minimal disruptions. Once installed it’s easy to use so you can get involved in your own bookkeeping giving you crucial visibility so you can be more hands-on where it is needed in your business. That’s one of the reasons why our clients love it. Seeing figures in real-time means we can discuss your financials with you and together be proactive in making business decisions and preparing financial information.

McKenzies Accountants bookkeeping and MTD advice

It is crucial to adopt suitable software solutions like QuickBooks and Xero to ensure compliance with MTD.

Not only do these software solutions help to improve accuracy and reduce administrative burden through automating routine tasks, but it can also enable businesses to save time when dealing with large volumes of work. 

It’s important that businesses always consider the decision carefully and how it will affect their business in the long run before selecting a software solution that best meets the businesses needs.  

As always if you have any queries about how best to prepare for Making Tax Digital for Income Tax Self-Assessment then please don’t hesitate to contact McKenzies accountants for advice about using Xero or QuickBooks for MTD.

With over 40 years of accounting expertise, our team of expert advisors are on hand to assist in any way they can.