Making Tax Digital for after-school clubs: what's changing in April 2026

TL;DR: Making Tax Digital for Income Tax (MTD ITSA) hits self-employed UK after-school club operators in three waves, based on qualifying income from self-employment and/or property: over £50,000 from 6 April 2026, over £30,000 from 6 April 2027, over £20,000 from 6 April 2028. Three things change for your business: digital records (the booking-spreadsheet plus shoebox-of-receipts approach is no longer compliant on its own), four quarterly summary submissions per tax year (plus the year-end declaration you already do), and a piece of HMRC-compatible filing software to handle the submissions. The work itself is small, about ten minutes a quarter once your records are in shape. The shift is the rhythm: from a once-a-year January scramble to a four-times-a-year discipline. Limited-company clubs file Corporation Tax instead and aren't covered by ITSA MTD.

If you run a UK after-school or holiday club as a sole trader, the headline news is short. MTD ITSA becomes mandatory in three steps, based on qualifying income from self-employment and/or property:

• From 6 April 2026 — qualifying income over £50,000.
• From 6 April 2027 — qualifying income over £30,000.
• From 6 April 2028 — qualifying income over £20,000.

That will catch many established sole-trader club operators, especially those running term-time + full-week holiday programmes across multiple schools or sites. If you also rent out a property, that rental income counts toward the same threshold. If your club is set up as a limited company, you file Corporation Tax — ITSA MTD doesn't apply to you, though digital record-keeping is still good practice.

The three real changes:

1. Digital records, not paper. Income and expenses captured in a structured digital form. A spreadsheet can work, but only if it pairs with MTD-compatible bridging software for the actual submissions. Cloud accounting software does both jobs natively. The booking-spreadsheet plus carrier-bag-of-receipts approach is no longer compliant on its own.
2. Four quarterly summary updates per tax year, plus your year-end final declaration. The quarterly updates are lightweight: total income, total expenses, by category. The reconciliation, the allowable-vs-not-allowable judgements, and the actual tax calculation all happen at the year-end declaration in January, the same as today.
3. HMRC-compatible filing software for the quarterly submissions. The old self-assessment portal won't accept MTD ITSA submissions. You need either a cloud accounting tool that handles the submission natively, or a spreadsheet paired with bridging software (typically £30–£50 per year).

Three changes. The rest is operational discipline.

Worth saying plainly: MTD doesn't change what tax you owe. It changes when HMRC sees what you owe. Same money, different rhythm.

Most after-school club operators don't need to overhaul how they keep records. If you already invoice parents (or run weekly direct-debit payments through a dedicated account), keep supplier receipts for snacks and craft materials, and log mileage between sites or schools, you're 80 per cent of the way there. The remaining 20 per cent is making sure that record is in a structured digital format your filing tool can read.

The clubs that'll find this hardest are the ones currently running on a paper register and a January reconciliation. If your "system" is a folder of receipts handed to your accountant in January, MTD effectively makes that approach non-compliant. Your accountant cannot submit a quarterly update if you've handed them nothing for the quarter.

Practical move for the next 30 days: get every business transaction running through a separate business bank account. Set a 15-minute weekly admin slot (Friday evening works for most clubs, after the last child has gone home and the cleaning is done) to log fees, snack-and-craft costs, hall hire, staff wages if applicable, and mileage against the right categories. That single habit takes you most of the way.

A quarterly update is not a tax return. It's a summary submission. For an after-school or holiday club, the categories you'll typically report are:

Total income for the quarter: weekly term-time fees per child, per-day or full-week holiday club fees, holiday-club early-bird discounts, late-collection charges, sibling rates, and any add-ons like school-uniform-day care or in-service-day cover.

Total expenses by category: hall hire or premises rent, utilities (where you pay them separately), snacks and refreshments, craft and activity supplies, equipment (sports gear, tablets, board games), staff wages and PAYE if you have employees (or contractor fees if you use freelancers), staff DBS renewals, paediatric first aid CPD, safeguarding training, professional memberships (Out of School Alliance, equivalent), insurance (public liability, employer's liability, professional indemnity), accountant or bookkeeper, software (booking apps, parent-comms platforms), phone, marketing, and use-of-home for admin.

You don't reconcile each line at the quarterly stage. You report category totals. The reconciliation, the allowable-vs-not-allowable judgements, and the tax calculation all happen at the final year-end declaration.

This is why the quarterly updates feel less burdensome than people fear, once your records are in shape. If your spreadsheet aggregates by category automatically, the quarterly submission is a copy-paste of the totals into your filing tool. Ten minutes per quarter, not a weekend.

If you employ any staff (a play leader, a club assistant, a holiday-club seasonal hire), you're already in PAYE territory and that has its own digital reporting requirements (RTI submissions to HMRC for every payroll run). PAYE is separate from ITSA MTD; both apply if you employ.

Casual or self-employed contractors who invoice you for sessions are accounted for as expenses on your books, with the contractor handling their own self-assessment. Make sure the contractor relationship is genuinely self-employed and documented as such — HMRC challenges clubs that pay regular weekly "contractors" who look more like employees in practice.

Staff costs are often the largest single expense category for clubs with employees. Tracking them quarterly under MTD just means consistent payroll discipline, which you already need for RTI anyway.

There are three legitimate routes. Each has a real fit and a real cost. Pick once, commit, and stop second-guessing.

Cloud accounting software like Xero, QuickBooks or FreeAgent. Subscription cost £12–£30 per month. Includes automated bank reconciliation, invoicing, and integrated MTD submission. Most include payroll modules at a small extra cost, which suits clubs with employed staff. Best fit: clubs with employees, multi-site operations, or higher turnover.

Spreadsheet plus bridging software. The spreadsheet is your record of income and expenses; bridging software (typically £30–£50 per year) reads the spreadsheet and submits to HMRC in the format MTD requires. Best fit: solo-operator term-time-only clubs with simple finances and no employees.

Hand it to your accountant. They handle the quarterly submissions on your behalf. Costs more than DIY, but if your accountant already does your year-end (and your PAYE if you employ), the marginal cost of adding ITSA MTD is manageable. The catch: they can only file what you give them. Quarterly cadence still requires you to maintain the records weekly.

There's no "best" answer. The right choice depends on your transaction volume, whether you employ staff, your tech comfort, and what you already pay for.

If you're still trading on a paper register and a January reconciliation, treat 6 April 2026 as a hard deadline and work backwards.

1. Open a separate business bank account if you don't already have one. Move all parent payments, supplier spend, and staff wages through it. Every other MTD step gets easier when business spend stops mixing with personal.
2. Pick one tool (spreadsheet plus bridging, cloud accounting, or your accountant) and commit. Set it up properly with the right categories for after-school-club work.
3. Start a 15-minute weekly admin slot. Friday evening, last child gone, kettle on. Log the week's fees, snack and craft costs, hall hire, and (if you employ) the week's payroll.
4. If you employ staff and run PAYE, your existing RTI submissions continue separately. ITSA MTD layers on top for the trading-income side.
5. If you operate as a limited company, ITSA MTD doesn't apply to you. Confirm with your accountant; some clubs blur the line between sole-trader and limited-company structures.

If you do nothing else this month: the bank account split. Most disputes about income, expenses, and category totals can be traced to mixed personal-and-business spend that nobody can reconcile cleanly. The worst route is no route.

For the broader operational discipline applied across UK trades, see keeping your business expenses HMRC-ready in 15 minutes a week. Same weekly habit, different setting.

LaunchKit makes a niche-specific MTD Compliance Kit for after-school clubs. It's an Excel workbook with the income categories, expense categories, and quarterly summary tabs already set up for club work, including separate columns for term-time fees, holiday-club fees, hall hire, staff wages, snacks, and craft supplies. £16.99 on Etsy and on yourlaunchkit.co.uk. One-time purchase. Works in Excel or Google Sheets, and pairs with any HMRC-recognised bridging tool when it's time to submit.

If a structured spreadsheet plus bridging is the right fit for your club, the kit takes ten minutes to set up. If you want full cloud accounting (especially with employees and PAYE), that's a different decision and we'd say so plainly.

The kit pairs with the after-school-club business documents bundle (£19.99) if you also want parent contracts, registration forms, behaviour and safeguarding policies, accident records, and GDPR templates with the right MTD-friendly categories built in.

This article is general guidance, not tax advice or guaranteed Ofsted readiness. For your specific tax position, consult a qualified accountant. For your registration and safeguarding obligations, consult Ofsted or your local authority's early-years team.