It is an exciting time as we move into a new tax year, and we want to support everyone moving into MTD for Income Tax this year. But first I’ll recap the 2025-26 tax year…

A Special Thanks to Our Early Adopters

For those of you who have volunteered for MTD in the 2025-26 tax year, we are extremely grateful for your endeavour and HMRC have repeatedly expressed their gratitude to every individual who has stepped up and started MTD early. Your willingness to participate in MTD is key to its success.

Reflecting on Success: Quarterly Updates

We are thrilled to share that our community has been leading the charge with Making Tax Digital (MTD) quarterly updates for the 2025-26 tax year. Thanks to your engagement, Clear Books is the No.1 software for Quarter 3 updates submitted and currently 3rd overall for total quarterly updatesacross all software for quarters 1, 2 and 3 combined!

Quarterly Update Re-Submission

We have now enabled the ability to resubmit quarterly updates. This means you can submit your Q4 update as soon as you like to check that box with HMRC. You then have plenty of time later to review and refine your digital records and resubmit the final update when you come to do your MTD tax return. So there’s no pressure to get your initial Q4 update "spot on."

Moving Forward: 2026-27 Tax Year

For all of you who have signed up for the 2026-27 tax year, the digital record-keeping journey begins on 6th April, and your first quarterly update will be due at the start of July.

To make sure you are ready, please make sure you have connected each of your businesses to HMRC through Clear Books.

Once this is done, you'll be able to view your quarterly obligations from HMRC and you know you are all set.

Digital Records vs. Tax Returns: A reminder

As you embark on this journey, it’s crucial to understand what goes where:

• Digital Records: You are only required to maintain digital records for your self-employment income and expenses and your property income and expenses.
• Tax Return: Personal transactions that are not business-related should NOT be included in your business income and expenditure digital records e.g. non-business bank account interest and personal pension contributions. This personal information continues to go directly onto your tax return as it always has.

Viewing Your HMRC Tax Estimate

Once you have submitted a quarterly update, you can view your tax estimate from HMRC via the MTD Tax Return feature in our software. This estimate will give you a full picture of your tax position for the in-progress tax year, including data submitted through payroll and other systems that automatically send information to HMRC.

Final Thoughts

Thank you again to everyone for being part of this important step in modernising the tax system. As always our excellent support team are here to help the Clear Books community navigate MTD for the first time. We will also be introducing new features and updates throughout the coming year in response to the community feedback, so watch this space.

Let's work together to make this year successful!