Digital Record Keeping Under MTD: What Self-Employed People in Kent Must Get Right

Making Tax Digital for Income Tax does not just change how you report to HMRC. It also changes how you keep your records. From April 2026, affected sole traders and landlords must maintain digital records of their business income and expenses using MTD-compatible software. For many self-employed people across Gravesend and Kent, this means saying goodbye to shoeboxes of receipts and paper ledgers.

At MCC Partners, we know that good record keeping is the foundation of a healthy business. Here is what you need to know about the new digital record keeping requirements and how to get them right from day one.

What Records Must Be Kept Digitally?

Under MTD for ITSA, you are required to keep digital records of all income and expenses relating to your self-employment or property business. For each transaction, you must record the amount, the category of income or expense, and the date.

For income, this means recording each sale, payment received, or rental receipt. For expenses, you need to categorise your spending into the standard categories such as cost of goods sold, vehicle expenses, travel costs, office supplies, professional fees, and so on.

These records must be maintained in software that can connect to HMRC's systems. While you can use spreadsheets, they must be linked to HMRC via bridging software to be compliant. Standalone spreadsheets without a digital connection will not meet the requirements.

The Digital Links Rule

An important aspect of MTD record keeping is the digital links requirement. All data must flow electronically between different parts of your system without manual copying, pasting, or re-keying. If you record a transaction in one place and it feeds into your quarterly update, that connection must be digital throughout.

This does not mean you cannot use multiple tools, but any transfer of data between them must be automated rather than manual. For most sole traders, using a single cloud accounting package eliminates this concern entirely.

Moving Away from Paper Records

If you currently keep paper records or rely on handwritten logs, the transition to digital can feel like a big step. However, it does not need to happen overnight. Start by choosing your MTD-compatible software, then begin entering your income and expenses digitally from a date that gives you several months of practice before April 2026.

Many modern accounting apps allow you to photograph receipts on your phone and attach them to transactions, which means you still have a record of the original document while meeting the digital requirement. Bank feeds, which automatically import your transactions from your business bank account, can also save significant time and reduce the risk of missing entries.

What About Existing Records?

You do not need to digitise your entire historical record keeping. The digital requirements apply from the date you are mandated into MTD for ITSA. However, keeping good digital records before that date is excellent practice and will make the transition smoother when the time comes.

Common Mistakes to Avoid

From our experience working with self-employed clients in Gravesend, the most common record keeping mistakes include mixing personal and business transactions, failing to record cash income, leaving categorisation until the end of the year, and not reconciling bank feeds regularly. Under MTD, these habits will cause problems more quickly because you are reporting every quarter rather than once a year.

The best approach is to set aside a small amount of time each week to review your records, categorise transactions, and ensure everything is up to date. A little regular effort prevents a much larger scramble at each quarterly deadline.

How MCC Partners Can Help

Getting your digital record keeping right from the start is the single best thing you can do to prepare for MTD. At MCC Partners on Saddington Street in Gravesend, we help self-employed clients across Kent set up their accounting software, configure their categories correctly, connect their bank feeds, and establish a routine that keeps their records accurate and compliant.

If the thought of going digital feels overwhelming, you are not alone, and you do not need to do it by yourself. Contact MCC Partners today and let us help you build a record keeping system that works for your business and keeps you on the right side of HMRC's new requirements.