Making Tax Digital: One Year to Go

As part of HMRC’s initiative to modernise the tax system, the Making Tax Digital (MTD) programme will become mandatory for all sole traders or landlords that meet certain criteria:

1. From 6th April 2026 if you have an annual business or property income of more than £50,000

2. From 6th April 2027 if you have an annual business or property income of more than £30,000

What’s Changing?

 Under the new MTD rules, you will be required to keep your business records digitally and submit updates to HMRC every three months. This means that third-party software will be required to maintain your records and ensure that your business information is accurately recorded and submitted in a timely manner. Additionally, you will be required to provide an annual declaration, which must be submitted by 31 January following the tax year.

How Chater Allan Can Help

 From April 2026 onwards, we will need our clients to provide us with regular updates of summary business information every three months. This will include details of your income, expenses, and any other relevant financial data. This information will make up the quarterly submissions to HMRC during the tax year.

To comply with these new requirements, you will need to register for the MTD service. As your agent, we will be able to complete your registration and guide you through the new MTD scheme, ensuring your new filing deadlines are met.

Some clients may already use third-party software for their bookkeeping, ensuring a smooth transition to MTD when it's time to send financial data to HMRC. However, we understand that some clients prefer not to use digital systems. Therefore, we can convert your financial data, whether it's paper invoices or a simple Excel spreadsheet, into a format acceptable by HMRC for this new scheme. If you would like to take this opportunity to start using accounting software to streamline your bookkeeping and reporting responsibilities, we can recommend a simple package and arrange this for you.

What You Can Do Next

 We strongly encourage you to familiarise yourself with the new MTD scheme. HMRC will be sending letters to all individuals affected by the upcoming requirements. Additionally, we will be posting guides on our website and contacting clients regarding early registration.

Although MTD will not start until April 2026, it could be advantageous to review your current bookkeeping methods and start updating your income and expenditure figures more regularly. This will prepare you for the requirement to submit updates to HMRC every three months.

Please do not hesitate to contact us if you have any questions or need further assistance with the transition to Making Tax Digital. We are committed to supporting you through this change and ensuring that your business remains compliant with the new regulations.