top of page
logo_material_monochrome_900_crop_all_objects_transparent_png.png
Data Technology

Excel vs QuickBooks

Making Tax Digital

QuickBooks online - accounts

QuickBooks_Logo_edited_edited.jpg

Making Tax Digital for Income Tax

 

We want to inform you about the upcoming Making Tax Digital for Income Tax (MTD for IT) initiative, which introduces new digital reporting requirements for individuals with self-employment or rental income.

 

Starting 6 April 2026, if your qualifying income exceeds £50,000 in the 2024/25 Tax Year, you will need to follow new digital reporting rules. From 6 April 2027, this will be extended to individuals whose qualifying income exceeds £30,000. Qualifying income is defined as gross turnover from self-employment plus gross income from rental properties.

What Does This Mean for You?


You will be required to:

 

  • Keep digital records for income and expenses for each self-employment or property business.

  • Submit quarterly updates to HMRC on your year-to-date transactions.

  • Finalise your end-of-year position with all personal income details and adjustments at year-end.

 

These changes will replace the annual reporting through Self-Assessment as you are accustomed to. Non-compliance will result in penalties, but income tax payment dates remain unchanged.

 

When Does This Affect You?


If your qualifying income exceeded £50,000 in 2023/24, you’re likely required to comply starting 6 April 2026, unless your qualifying income falls below £50,000 in 2024/25. We must ensure that you are using an appropriate digital record-keeping system from 6 April 2026 and are ready to submit the first quarterly update report for the 2026/27 tax year, due on 7 August 2026.

 

If your qualifying income exceeds £30,000, you will be required to comply from 6 April 2027 with the first quarterly update report due by 7 August 2027.

What Are Acceptable Digital Records?

​

Individuals will have to keep digital records of the amount, category and date of income and expenses relating to their sole trade and/or property businesses. These records can be kept either in purpose-built software, or on spreadsheets that use compatible bridging software to send updates to HMRC. HMRC won’t provide software, but you’ll need a compatible system to meet the new rules. If changes are needed, we can help find a solution that fits your needs.

What Are the Next Steps?

​

We’re reaching out early to help you prepare, explore options and find a solution that works for you. HMRC will be writing to individuals which they believe will be mandated from 6 April 2026. Depending on your current record-keeping system and VAT status, there may be more work involved so do not hesitate to get in touch.

 

HMRC are running an MTD for IT testing programme throughout 2025/26. You can join at any time, and penalties won’t apply during the test, please contact us if you’re interested in participating.

Making Tax Digital for VAT

Staying on top of changes to tax regulations is crucial. Getting the right software in place and preparing ahead of time makes filing your returns and paying your taxes quick and easy, helping to manage finances so your cash flow isn't impacted.
You can also avoid potential costly penatlies for non-compliance.

By now you know about Making Tax Digital (MTD). It's HMRC's biggest change to the tax system for decades, aiming to take the whole operation into the digital sphere in the next few years.

MTD for VAT rolled out for businesses with annual turnover above £85,000 from April 2019 and extended to all VAT-registered businesses, regardless of turnover, from April 2022.

bottom of page