Making Tax Digital Myths Busted

What every small business owner needs to know before April 2026

Let's be honest… MTD has got a lot of people confused right now. And it's not just business owners. Even accountants are still getting to grips with it. A recent survey showed only 14.6% of accountants and bookkeepers feel fully confident about the next stage of Making Tax Digital.

So if you're feeling unsure… you're definitely not alone. But here's the thing. MTD isn't something to panic about. It's something to understand early so you can stay ahead and avoid stress later.

Let's break down the biggest myths we're seeing and what's actually true.

First things first… what is MTD?

Making Tax Digital is HMRC's plan to move the UK tax system fully online. From April 2026, if you're a sole trader or landlord earning over £50,000, you'll need to keep digital records, use compatible software, and submit updates every quarter. Simple in theory… but there's a lot of noise out there.

Myth 1: "This is all being pushed by software companies"

Nope. MTD is coming directly from HMRC. It's a government-led change designed to modernise the tax system. Software companies are just building tools to help you comply.

Myth 2: "This means four times the work"

This is where people get it wrong. Right now, most businesses do everything once a year. Cue the January panic. MTD spreads the workload across the year instead. So instead of one massive stressful deadline, you get smaller, manageable updates. Honestly… it can actually make life easier.

Myth 3: "Only accountants should handle everything"

Not anymore. MTD is designed to give business owners more control. With modern software, you can snap receipts, track income, and stay on top of your numbers. And your accountant can step in to review, guide and keep everything compliant. It's teamwork, not handover.

Myth 4: "There's no real benefit to me"

There actually is. When your records are up to date all year: no last-minute panic, no hunting for receipts, no nasty tax surprises. You get a clear picture of your business in real time. That's a game changer.

Myth 5: "It will damage my relationship with my accountant"

It's the opposite. You'll likely speak to your accountant more regularly, not just once a year. That means better advice, more support, and a stronger relationship. It becomes ongoing support, not just a yearly catch-up.

Myth 6: "It's going to cost loads more"

There may be some additional cost. Let's be real. But that reflects more regular work, more support, and better systems. And if done properly, it can save you money by reducing errors, improving tax planning, and avoiding penalties.

Myth 7: "There's no free software"

This one surprises people. There are free options available. For example, FreeAgent is free with NatWest, RBS, Ulster Bank and Mettle accounts. So you don't always need to add extra costs.

Myth 8: "Spreadsheets are fine"

Spreadsheets are great… until they're not. They don't meet MTD requirements on their own, can create errors, and aren't always secure. MTD needs proper digital links between records and submissions. Spreadsheets alone won't cut it anymore.

Myth 9: "Systems won't talk to each other"

They do. MTD software is designed to handle your business income, submit updates to HMRC, and pull everything together for your final declaration. You can still record other income like PAYE or capital gains separately. It all comes together at the end.

Myth 10: "It's too late to get ready"

It's not. In fact… now is the perfect time. The earlier you start, the smoother the transition, the less stress later, and the more confident you'll feel. Waiting until 2026? That's when it gets messy.

What this means for you

If you're a sole trader, landlord or small business owner, MTD is coming whether you're ready or not. But you've got two options: leave it until the last minute and panic, or get set up early and stay in control. You already know which one is better.

How Kernow Accountancy can help

This is exactly what we're helping our clients with right now. We'll get you set up on the right software, show you how it works (no jargon), keep everything compliant with HMRC, and support you all year round. No stress. No confusion. Just a simple system that works.

Final thought

MTD isn't about making life harder. It's about staying organised, being more in control, and removing the January chaos. And once you're set up properly… it actually makes running your business easier.

If you want to get ahead of MTD now instead of scrambling later, the Kernow team are here to help — call 01326 377104.