Author: Phillips & Co Accountants, Chester
Date: 18 August, 2025
For decades, the “shoebox method” has been a familiar, if chaotic, staple for many self-employed individuals and landlords in Chester. The annual ritual of gathering a year’s worth of crumpled receipts and invoices is a stressful tradition. However, the era of the shoebox is officially coming to an end. HM Revenue and Customs (HMRC) is rolling out its Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) initiative, a change that will fundamentally reshape how small businesses manage their finances.
This isn’t just a minor tweak to the tax system; it’s a mandatory shift to digital record-keeping and quarterly reporting. For those unprepared, it can seem daunting. But with the right guidance, it can be an opportunity to streamline your finances. As specialist accountants in Chester, our job is to turn this regulatory challenge into a seamless transition for you.
What is Making Tax Digital (MTD) for ITSA?
Making Tax Digital is a government initiative designed to make the UK tax system more effective, efficient, and easier for taxpayers to get right. The next phase, MTD for ITSA, applies to self-employed individuals and landlords with an annual business or property income above a certain threshold.
Instead of filing a single Self-Assessment tax return once a year, you will be required to:
- Keep digital records of your income and expenses.
- Use MTD-compatible software to manage your accounts.
- Send quarterly updates of your income and expenses to HMRC.
- Submit a final declaration at the end of the tax year.
The goal is to provide a more real-time view of your tax liabilities, helping to prevent errors and reduce the chance of a surprise tax bill.
How Our Team of Accountants in Chester Can Help
Navigating this change alone can be complex and time-consuming. Choosing the wrong software or misunderstanding the new submission rules could lead to non-compliance and potential penalties. This is where seeking professional advice is crucial.
Our team of expert accountants in Chester is dedicated to making this transition effortless for our clients. We provide end-to-end support to ensure you are compliant and confident long before the deadline.
Our MTD readiness service includes:
- A Free MTD Readiness Check: We’ll start with a free, no-obligation assessment of your current bookkeeping methods to determine exactly what you need to do to become compliant.
- Software Selection and Setup: The market is flooded with MTD-approved software, and choosing the right one for your specific needs is vital. We have partnered with leading providers like Xero, QuickBooks, and FreeAgent. We will help you select the most suitable and cost-effective option and get it set up correctly.
- Ongoing Support and Filing: We don’t just set you up and leave you to it. We can manage your quarterly submissions and final declaration, ensuring accuracy and timeliness. This frees you up to focus on what you do best—running your business—while we handle the compliance.
Get Ahead of the Curve Today
The deadline for Making Tax Digital for ITSA is approaching. The businesses and landlords in Chester who prepare now will find the transition smooth and even beneficial, unlocking new insights into their financial health. Those who leave it to the last minute risk a stressful and costly scramble to catch up.
Don’t wait for the deadline to loom. The era of the shoebox receipt is over, but with the right partner, the future of digital tax can be simple and stress-free.
Contact Phillips & Co, your local accountants in Chester, today to book your free MTD readiness check and get ahead of the curve.
Disclaimer
The information contained in this blog is for general guidance only. It does not constitute professional advice and should not be relied upon as such. Always seek tailored advice from a qualified accountant regarding your specific circumstances.