Making Tax Digital: Eligibility & Registration Guide

Making Tax Digital for Self Assessment: eligibility & registration guide

Navigating taxes is a core challenge for every business owner. With Making Tax Digital (MTD) transforming the UK tax landscape, choosing the right digital banking partner can make your compliance seamless from day one.

Whether you're registering as a sole trader or setting up a limited company, Zempler’s tools are designed to help small businesses stay organised, avoid surprises and focus on growth. As always, for anything complex or specific to your situation, it's worth speaking to a qualified tax advisor.

What is Making Tax Digital and why is it important?

MTD is a government initiative to modernise the UK tax system with digital record-keeping and more frequent tax updates. It’s being rolled out in phases and isn’t yet mandatory for all businesses, but is already transforming how many sole traders and landlords manage their tax obligations.

Instead of one big annual tax return, MTD requires:

• Digital records kept in compatible software
• Quarterly tax submissions to HMRC
• A final end-of-year declaration

If you’re a sole trader or run a small business, MTD is an opportunity to streamline your financial admin. And with tools like built-in expense tracking and cash flow monitoring, Zempler can help you do just that, making it much simpler to stay on top of your figures.

Who needs to follow MTD for Self Assessment – and when?

You only need to comply with MTD for Self Assessment (which you may also see written as MTD for ITSA, where the ITSA stands for Income Tax Self Assessment) if your gross income from self-employment exceeds the gross income thresholds set by HMRC.

Here’s how the timeline looks over the next two years:

• From April 2026 – Required if your gross income for 2024 to 2025 is over £50,000
• From April 2027 – Required your gross income for 2025 to 2026 is over £30,000

HMRC hasn’t confirmed whether the income threshold will drop further in the future, but it's a possibility.

Let’s take an example: you’re a freelance web developer earning £52,000 before expenses. From April 2026, you’ll be required to:

• Keep digital records
• Submit quarterly updates
• File a final annual declaration

Zempler Bank’s Making Tax Digital features let you record, categorise and submit VAT and income tax returns directly from your business bank account free of charge. Real‑time insights and reminders keep you ahead of every deadline.

Check whether you need to use Making Tax Digital on GOV.UK.

Zempler Bank makes it easy for you to get MTD for Income Tax ready

Zempler Bank has partnered with Coconut to make MTD preparation seamless. Coconut are an accounting software provider for sole traders and self-employed, and when you open a Zempler Bank business account, you'll get free access to Coconut's HMRC-recognised MTD accounting software for up to 24 months – saving you up to £238.

It's an industry-first integration that lets you set up both your business bank account and MTD-compliant software in minutes.

Learn more.

How to register for MTD

You won’t be enrolled for MTD automatically so need to actively register for it – or your accountant can register on your behalf.

Here’s how it usually works:

1. Choose MTD-compatible software

Only approved tools – like the software that comes with your Zempler Bank business account. Spreadsheets and paper records are no longer accepted under MTD requirements.

2. Register through GOV.UK

You’ll need your:

• Government Gateway ID
• National Insurance number
• Self-employment or property income details

3. Link your software to HMRC

This lets you submit your updates and final declaration directly.

Important: HMRC is expected to begin contacting those who may need to comply with MTD based on data from 2024/25 tax returns. If you’re close to the threshold we’ve described above, don’t wait – check your position early.

Are there any exemptions?

Yes. Some individuals may be exempt from MTD if they meet specific criteria.

You may qualify if you:

• Can’t use digital tools due to age, disability or lack of internet access
• Have religious beliefs that prevent you from using technology

If that applies to you, you’ll need to apply for an exemption via HMRC and provide the relevant evidence.

Zempler and Coconut have teamed up to simplify MTD compliance for small businesses

We've made it easier than ever to get MTD-ready by partnering with Coconut, one of the UK's leading accounting software providers for sole traders and landlords.

Here's what you get:

• 2 years of Coconut software free when you open a Zempler Bank business account (saving up to £238).*
• Seamless setup: Apply for your Zempler account through Coconut's app in just minutes.
• HMRC-recognised software: Coconut is fully approved for MTD for ITSA quarterly submissions.
• Complete digital records: Snap photos of receipts, track income and expenses, and submit quarterly updates all in one place.
• VAT returns sorted: Submit VAT returns directly to HMRC from your Zempler account.
• Accountant collaboration: Share your records with your accountant in real-time through Coconut's Partner Portal.

It's the UK's first embedded sign-up process that combines an MTD tax solution with a business bank account.

* For information on the offer and to see if you’re eligible, see the offer terms here.