Making Tax Digital: What Durham Businesses Need to Know

Making Tax Digital: What Durham Businesses Need to Know

The UK government’s Making Tax Digital (MTD) initiative is reshaping the way businesses handle tax. For many small and medium-sized businesses in Durham and across the North East, it’s no longer a question of if you’ll need to comply — but how.

No matter what your Durham business looks like or involves, MTD will impact how you keep records, file returns, and interact with HMRC. This shift towards digital-first tax management is designed to reduce errors, increase transparency, and streamline the reporting process — but for those unfamiliar with accounting software or digital tools, it can feel overwhelming.

Thankfully, with the right guidance and systems in place, compliance with MTD can be straightforward — and even beneficial for your business in the long run.

Here’s what you need to know to stay ahead.

What is Making Tax Digital?

MTD is a government-led move to digitise tax reporting, making it easier and more efficient for businesses to get their tax right. It requires businesses to:

• Keep digital records of income and expenses

• Submit quarterly tax updates to HMRC using approved software

• Eventually replace annual tax returns with real-time reporting

Who Needs to Comply — and When?

As of 2024, the following applies:

• VAT-registered businesses (with turnover above £85,000) must already follow MTD rules.

• VAT-registered businesses below the threshold must comply since April 2022.

• Self-employed individuals and landlords earning over £50,000 must join from April 2026, and those earning over £30,000 from April 2027.

MTD for Durham-Based Businesses

Whether you're a:

• Plumber in Consett

• Hairdresser in Chester-le-Street

• Retailer in Durham City Centre

• Café owner in Seaham

• Or an agricultural contractor in Weardale

...you’ll need to make sure your tax processes are digital, timely, and HMRC-compliant.

Common MTD Questions from Durham Businesses

1. What software do I need?

You’ll need MTD-compatible software such as Xero, QuickBooks, Sage, or FreeAgent. Many Durham businesses use accountants or bookkeepers to help set this up.

2. What if I’m not tech-savvy?

You're not alone. Many smaller trades and sole traders worry about the shift to digital. We recommend training sessions or working with a local accountant — like The Tax Faculty — to get set up.

3. Can my accountant handle it all for me?

Yes — as long as your records are digital, an accountant can submit the reports and manage MTD filings on your behalf.

Our 5 Tips to Get Ready for MTD

1. Switch to digital record-keeping now – even if your deadline is months away.

2. Choose HMRC-recognised software that suits your business size and type.

3. Review your current bookkeeping process — are you paper-based? Time to modernise.

4. Train your team or staff to use the software confidently.

5. Get professional support from tax and accountancy experts who understand local business needs.

Why it Matters

Getting MTD wrong can mean:

• Missed deadlines

• Penalties

• Increased stress

But getting it right means:

• More accurate records

• Easier end-of-year reporting

• Better business insights

Need Local Support? We're Here to Help

At The Tax Faculty, we support Durham and North East England businesses through every stage of Making Tax Digital. We provide tailored advice and hands-on support to make MTD simple.

Ready to Go Digital? Let’s Talk.

Don’t wait for the deadline to catch up with you. Contact The Tax Faculty today for a free consultation and let’s get your business MTD-ready.