Making Tax Digital for Income Tax and animal services businesses

If you work in animal and pet services and are self-employed, how you report your income and expenses to HMRC may have now changed.

Since April 2026, Making Tax Digital for Income Tax (MTD IT) has applied to many individuals across the sector, so now is a good time to understand what's involved.

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Who needs to pay attention?

MTD IT applies to self-employed individuals and those who receive property rental income, once their gross annual income reaches certain thresholds. This includes income from all self-employed work and property combined.

You need to follow the new rules at these points in time, if your total gross income is:

  • £50,000 or more from April 2026 (already in effect)
  • £30,000 or more from April 2027
  • £20,000 or more from April 2028

This affects a broad range of self-employed individuals in animal and pet services. This includes dog walkers, pet sitters, dog groomers, veterinary professionals working independently, farriers, equine dentists, trainers, as well as breeders, kennel and cattery owners, livery yard operators, and other specialised animal care providers.

For many involved in animal services, self-employed income can come from several sources. You might combine dog walking with pet sitting, grooming with retail sales, training services with boarding, or run a small breeding or livery business alongside other work.

HMRC considers your total gross income from all self-employed activities when determining whether MTD IT applies. Only your self-employed income and any income from property count towards MTD IT.

If you also have a part-time job paid through PAYE, that employment income does not form part of the MTD IT threshold calculation.

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What’s changed under MTD for Income Tax

MTD IT replaces the single annual Self Assessment return with a more regular digital reporting process. The way your tax is calculated does not change, but how you keep records and submit information to HMRC does.

There are three core requirements:

  • Keep digital records of income and expenses
  • Send quarterly updates to HMRC using HMRC-recognised software
  • Submit a final annual declaration by 31 January after the end of the tax year

Quarterly updates only require summary totals of your income and expenses for the year-to-date. You do not need to upload every invoice or receipt.

The updates are also for informational purposes only for HMRC and do not trigger tax payments each quarter. They simply keep your records current, with the final declaration at year's end confirming your actual tax position. As with self-assessment, you will need to pay your final tax bill by 31 January after the end of the tax year.

One of MTD IT’s aims is to shift towards giving you a more digital, real-time view of your business finances rather than completing everything at the end of the tax year. Along the way, you’ll see an estimate of your likely tax bill at the end of the tax year, which can be useful for budgeting.

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What this means for animal services businesses

Animal and pet service providers often have varied working patterns, multiple clients and a mix of income and expenses, which can make record-keeping feel like something to tackle later. MTD IT simply means keeping those records digitally and updating them more regularly.

Depending on your business, you may need to track:

  • Cash and bank payments from multiple clients
  • Mileage and travel between visits or yards
  • Equipment, feed, grooming products or insurance costs
  • Fees or commissions charged by booking apps or referral platforms (for example, where clients book your services through a third-party website)
  • Home-based versus mobile business expenses

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Choosing software that works for you

To submit quarterly updates, you’ll need HMRC-recognised software. HMRC isn’t providing a free option, so it’s important to choose something that suits how you already work and your budget.

Some solutions allow you to keep using spreadsheets while linking them to HMRC through bridging software. Others provide simple apps or browser-based tools that help you track income and expenses as you go.

TaxNav, for example, is HMRC-recognised for MTD IT and designed for straightforward self-employed record-keeping. It also allows you to keep your existing spreadsheets if you prefer, while still meeting digital reporting requirements.

You automatically get a 30-day free trial and we offer low-cost subscriptions to keep things affordable. An annual subscription is £60+VAT or pay as you go for £6+VAT per month.

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Getting MTD-IT ready

If you haven’t started yet, don’t panic. Focus on the basics:

  1. Check you’re in scope
  2. Sign up with HMRC
  3. ‍Choose your software - don't forget, TaxNav offers a 30-day free trial
  4. Start keeping digital records
  5. Diarise your quarterly updates deadlines
  6. Diarise your final (annual) declaration deadline

Once those are in place, everything else follows naturally.

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A smoother way to stay compliant

MTD IT is ultimately about keeping business records up to date and sharing summary information with HMRC more regularly.

For many animal service providers, the biggest change will simply be moving from paper or ad hoc records to a digital system that works consistently throughout the year.

With the right tools in place, MTD IT becomes another routine part of running a well-organised animal services business rather than a last-minute administrative headache.

TaxNav supports digital record-keeping, quarterly updates and final declarations in one place. Whether you prefer to use our handy accounting functionality or your existing spreadsheet, we've got you covered with an affordable and straightforward way to comply with MTD IT.

To find out more about how TaxNav works in practice and sign up visit taxnav.digital

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