Questions and Answers
What is Making Tax Digital for Income Tax?
I’ve heard people mention Making Tax Digital (MTD) for Income Tax, is this relevant to my business?
Last updated 8 Oct 2021 | First published 26 Aug 2021
1 min read
Making Tax Digital
Making Tax Digital for VAT has already come in for all VAT-registered businesses.
With regards to Making Tax Digital for Income Tax, there have been several expected start dates in the past which have subsequently been postponed, but currently it is due to start from April 2026 for sole traders and landlords with business and property income of £50,000 or more. From April 2027, those with income above £30,000 will need to start using MTD. We await further news on a possible start date for those with income below £30,000.
Under the Making Tax Digital rules, your business will need to keep its accounting records digitally and will also have to file quarterly returns to HMRC which show income and expenditure for the period. At the end of your accounting period you will need to finalise your business income, making any accounting adjustments and confirming to HMRC that the updates you sent are correct. After the end of the tax year, a final declaration will need to be filed (this replaces the self-assessment tax return).
If you would like any advice or assistance in this area in preparation for the changes, please contact us on 01582 945 622 or use our simple online contact form to arrange a free initial consultation.
Last updated 8 Oct 2021 | First published 26 Aug 2021
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
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