Making Tax Digital for cattery owners: what's changing in April 2026

TL;DR: Making Tax Digital for Income Tax (MTD ITSA) hits self-employed UK cattery owners 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 diary plus carrier-bag-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.

If you run a UK cattery 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 catteries running 10–20 pens through peak Christmas and summer demand, especially those layering grooming, day-boarding, or retail income on top. If you also rent out a property, that rental income counts toward the same threshold.

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 diary 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 cattery owners don't need to overhaul how they keep records. If you already invoice owners (or run booking deposits and balance payments through a dedicated account), keep supplier receipts for food and litter, and log mileage for vet trips or supplier runs, 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 catteries that'll find this hardest are the ones currently running on a paper booking diary and a January reconciliation. If your "system" is a folder of receipts handed to your accountant once a year, 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 (Sunday evening works for most catteries, after the last collection of the day) to log boarding fees, food and litter purchases, vet costs, licence-related expenses, 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 a cattery, the categories you'll typically report are:

Total income for the quarter: standard boarding fees per pen-night, peak-season uplifts (Christmas, summer, Easter), single-cat versus multi-cat-from-same-household discounts, day-boarding income, retail product sales (food, treats, accessories), and any add-ons like specialist diets, medication administration fees, or grooming.

Total expenses by category: food and litter, premises rates and maintenance, utilities, vet bills (your own routine vet costs, not bills passed back to owners), pen and equipment renewal, insurance (public liability, custody-of-animals cover, employer's liability if you have staff), local-authority licence fees and inspection costs, professional memberships (Pet Industry Federation, Feline Advisory Bureau / iCatCare), training and CPD, accountant, bank charges, software (booking systems), phone, marketing, workwear, and use-of-home if you live on-site.

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.

VAT MTD has been mandatory since 2019. Most sole-trader catteries run below the £90,000 VAT threshold and aren't VAT-registered. If you are VAT-registered (a multi-pen operation with retail layered on top can cross the threshold), you've already been doing quarterly digital VAT submissions, and ITSA MTD layers on top as a separate filing.

Your local-authority animal-licensing fees and inspection costs (under the Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018, or equivalent in Scotland, Wales, or Northern Ireland) are legitimate business expenses recorded under "professional fees" or a dedicated "licensing" category. The licence itself is a regulatory matter, not a tax matter. Your accountant doesn't deal with licensing; your local-authority animal-licensing officer does.

Cash payments are the area HMRC scrutinises most heavily for any cash-frequent business. Catteries are less cash-heavy than some pet-services trades because most owners pay deposits in advance by card or transfer, but cash on collection still happens. Every cash payment needs a record at the moment of payment.

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. Best fit: catteries with employed staff, those running grooming or retail alongside boarding, or anyone with a high transaction volume.

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 catteries with simple finances and a preference for one-time purchases over monthly subscriptions.

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, the marginal cost 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, your tech comfort, and what you already pay for.

If you're still trading on a paper booking diary 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 owner deposits, balance payments, and supplier spend 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 cattery work.
3. Start a 15-minute weekly admin slot. Sunday evening, last collection done, kettle on. Log the week's boarding fees, food and litter, vet costs, and any retail.
4. If you're VAT-registered, layer ITSA MTD onto your existing quarterly rhythm. Same month-end discipline, second submission.
5. If you're not VAT-registered (most catteries aren't), build the rhythm now. The first April 2026 quarterly window will arrive faster than you expect.

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. The worst route is no route.

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

LaunchKit makes a niche-specific MTD Compliance Kit for catteries. It's an Excel workbook with the income categories, expense categories, and quarterly summary tabs already set up for cattery work, including separate columns for boarding fees, peak-season uplifts, retail income, food and litter, vet bills, licence fees, and Pet Industry Federation membership costs. £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 cattery, the kit takes ten minutes to set up. If you want full cloud accounting instead, that's a different decision and we'd say so plainly.

The kit pairs with the cattery business documents bundle (£19.99) if you also want owner contracts, cat intake forms, vaccination declarations, emergency authorisation forms, and GDPR templates with the right MTD-friendly categories built in.

This article is general guidance, not tax advice or veterinary advice. For your specific tax position, consult a qualified accountant. For licensing, vaccination protocols, or animal-health matters, consult your local-authority animal-licensing officer or a registered veterinary surgeon.