The MTD Tidy-Up: What to Fix Now Before the January Filing Rush

Seven months is long enough for a new process to stop feeling new and start showing its rough edges. Making Tax Digital for Income Tax has been part of the furniture for sole traders and landlords with qualifying income above £50,000 since April 2026. If you are in scope, you have already sent at least a couple of quarterly updates. The question now is not whether you understand the theory. It is whether your records are solid enough to survive a busy January.

Start with the bank account, not the spreadsheet

The most common MTD headache is not a software bug. It is a bank account that does three jobs at once: personal spending, business income and the occasional client payment that looked like a refund. If your business and personal money share the same account, every quarterly update becomes a detective story.

You do not need a fancy business bank account to get organised, although a separate account makes life easier. What you do need is a clean trail. Check the last few months and look for transactions that are still uncategorised, duplicated or sitting in a suspense account. If you have been putting off a reconciliation, do a short one now rather than a long one in January.

The quarterly update is not a mini tax return

A common early mistake is treating each quarterly update like a full Self Assessment return. It is not. You are sending summary figures for income and expenses, using the categories HMRC asks for. You are not expected to file every invoice with a bow on top.

That said, the summary is only as good as the records behind it. If your bookkeeping is a shoebox with a banking app attached, the quarterly update will feel harder than it needs to. Use the software or digital records you have already set up. Let the bank feed do the boring work. Then spend your time on the transactions that need a human decision: mixed personal and business costs, property income, mileage, and one-off purchases.

Try the someone-else test

A good test for your digital records is simple: could another person follow them without ringing you six times? If the answer is no, tidy up the bits that would confuse them. That means clear file names, dates on receipts, notes on unusual transactions, and a sensible folder structure.

For sole traders, this often means keeping sales invoices, expense receipts and bank statements in one place. For landlords, it means keeping property income and expenses separate from any trading business. If you have both, do not let them blur together. HMRC may ask questions later, and future you will be grateful for the clarity.

Fix these three recurring messes now

First, uncategorised transactions. Open your software and look for anything sitting in an unnamed or default category. Sort the last three months first, then work backwards if you have the time.

Second, missing receipts. You do not need a paper archive for everything, but you do need a digital record. Photograph receipts as you get them, or use a receipt-scanning app. If a receipt has faded or gone missing, make a note of what the expense was and when it happened. Do not invent a figure and hope for the best.

Third, mileage and use of home. These are classic areas where people claim a round number and then cannot explain it later. Keep a simple mileage log for business journeys. If you claim use of home, make sure the method you use is consistent and recorded. A plain-English note in your records is better than a vague memory in your head.

Get the dates straight

The 2026-27 tax year has quarterly update deadlines that are easy to muddle. The quarter ending 5 January 2027 is due by 7 February 2027. The quarter ending 5 April 2027 is due by 7 May 2027. The final declaration for 2026-27 is due by 31 January 2028.

January is still a big month because 31 January 2027 is the Self Assessment filing deadline for the 2025-26 tax year for many people. So even if you are now in MTD, do not ignore the older deadline. Check which returns are still outstanding and put the dates in your calendar with reminders a week before, not the morning of.

When to ask an accountant for help

MTD is designed to be doable for straightforward sole traders. It becomes less doable when you have a backlog, several income streams, property income, VAT, PAYE, or a letter from HMRC that uses more jargon than a council planning notice.

Ask for help if your records are more than a few weeks behind, if you are unsure what counts as a business expense, if you have sold or bought a significant asset, or if you have received a penalty or compliance check letter. A short conversation now is usually cheaper than a rushed rescue in January.

A 30-minute tidy-up plan for this week

Download the last three months of bank statements. Open your accounting software and categorise anything obvious. Make a list of missing receipts or unexplained payments. Note any questions for your accountant. Check the next two MTD deadlines and the 31 January Self Assessment deadline. Then book a slot in your diary to finish the tidy-up before the January rush.

You do not need a perfect system. You need a system that holds together when you are busy. That is the whole point of the tidy-up.