Why doing MTD yourself could cost more than you think

Published: 29/01/2026 By Hannah Duncan

Making Tax Digital (MTD) is often presented as a simple step towards digital reporting and for many sole traders and landlords', it can be a positive move. However, it does bring more frequent reporting, clearer rules, and a greater focus on keeping records up to date.

It’s understandable that some sole traders and landlords' consider managing MTD themselves to keep costs down. In practice, though, the extra time involved, risk of errors, and ongoing admin can quickly add up often outweighing the savings they expected.

It’s more than just a software change
MTD isn’t simply about switching accounting software. It requires:

• Consistent digital record-keeping
• Quarterly submissions to HMRC
• Accurate, reconciled data throughout the year
• Digital links between system

For businesses already stretched for time, this added workload can quickly become disruptive.

The hidden costs of DIY MTD
At first glance, managing MTD yourself may seem cost-effective. In reality, many sole traders and landlords' underestimate the time and effort involved.
 
Quarterly updates mean bookkeeping becomes a year-round responsibility, rather than something dealt with once a year taking valuable time away from running your business.

Errors in digital records or submissions can lead to penalties, resubmissions, and added stress, all of which you must manage yourself.

MTD data can provide useful financial insights, but only if it is reviewed and interpreted correctly. Without that expertise, its value can easily be lost.

There is also the challenge of choosing, setting up, and maintaining MTD-compatible software which requires time, confidence, and ongoing attention.

The question many sole traders and landlords' face is simple:
do you want to spend time learning new systems, or focus on growing your business?

How professional support changes the picture
Working with an accountant transforms MTD from an administrative burden into a structured, reliable process. With professional support, sole traders and landlords' benefit from:

• Confidence that submissions are accurate and compliant
• Reduced admin time and internal workload
• Proactive advice based on real-time financial data
• Early identification of issues, not surprises at year-end

MTD becomes something that works for the business, not against it.

MTD isn’t just about compliance, it can also provide clarity
When managed well, MTD can give sole traders and landlords' clearer, more up-to-date financial information throughout the year. Regular reporting allows trends to be spotted earlier, supports better cashflow planning, and helps to make more informed decisions not just at year end, but all year round.

With the next phase of MTD for Income Tax Self Assessment starting in April 2026, and expanding further in April 2027, now is a good time to review whether your current approach is suitable for the changes ahead.

If you’re unsure whether your systems, software, or processes are ready, speaking to your accountant early can help ensure MTD works for your business not against it.