Why completing your tax return early Is more important than ever in the run up to Making Tax Digital (MTD)

With the January tax return deadline still months away, many individuals understandably delay their submissions. However, with the government’s Making Tax Digital (MTD) for income tax coming into effect in April 2026, there’s a strong case for getting ahead of the curve this year.

MTD will fundamentally change how self employed individuals and landlords manage and report their finances. Under the new rules, those earning over £50,000 from self employment or property (reducing to £30,000 in 2027), will be required to maintain digital records and submit quarterly updates to HMRC using MTD compatible software.

So, what does this have to do with your tax return now?

1. It’s a chance to test your digital systems

Completing your 2024/25 tax return return early gives you the perfect opportunity to review your record keeping processes. Are you already using digital tools? Are they MTD compliant? If not, this is the year to explore accounting software and ensure a smooth transition well before MTD becomes mandatory.

2. You’ll avoid unnecessary stress

January is a notoriously busy month for HMRC and taxpayers alike. By filing early, you’ll avoid the last minute rush, technical issues, and unexpected documentation delays. If problems do arise, there’s ample time to resolve them.

3. Know where you stand financially

Filing early allows you to see exactly what tax is due and gives you more time to budget. Even though payment isn’t due until January, knowing your liability now can help you manage cash flow more effectively, particularly for those whose income fluctuates or who are recovering from a tough trading period.

4. Prepare for MTD with confidence

MTD will bring quarterly reporting, a new mindset around ongoing compliance and a shift away from the traditional once a year tax return. Starting your preparation now by embracing digital tools and staying on top of your records can make the 2026 transition significantly smoother.

If you’d like to learn more about Making Tax Digital you can read our blog here

In summary

While the official deadline may still feel far off, the wider digital transformation of tax in the UK is well underway. By filing your tax return early this year, you’re not just avoiding a deadline, you’re actively preparing your business for the future.

Need help making the switch to digital? Get in touch with us today to explore your options and ensure you’re MTD ready.