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All VAT-registered businesses are required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns. If you don’t comply with the rules and meet Making Tax Digital deadlines, you could face a fine.
Making Tax Digital (MTD) applies to all landlords, self-employed and partnerships whose gross income from those sources combined exceeds £50,000 a year.
This will make submitting quarterly updates much more efficient, as you can action them all at the same time, in line with HMRC requirements. Speak to with us if you need help doing this.
To avoid admin overload, aim to be up and running with your new accounting solution well ahead of MTD for Income Tax coming into force.
Making Tax Digital for Income Tax for partnerships with individual partners.
TBL Accountants are here to help you with your business’s cloud accounting needs. With our cloud accounting services, you can access your accounts from anywhere, at any time, from any device. Whether you want to benefit from the real-time analytics and security cloud accounting offers or managing your business’s compliance with Making Tax Digital, we can help.
Making Tax Digital for Income Tax for self-employed business owners and landlords will become compulsory for many businesses from April 2026.
From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software. Those with an income of between £30,000 and £50,000 will need to do this from April 2027.
You cannot sign up if you are a:
If your qualifying income is £50,000 or less, you do not need to sign up, but you can still choose to voluntarily sign up. Most customers will be able to join voluntarily beforehand meaning they can eliminate common errors and save time managing their tax affairs.
Your qualifying income is the combined income that you get in a tax year from self-employment and property income sources. All of your qualifying income must be reported through Making Tax Digital compatible software.
Qualifying income sources
If you get income from a partnership
Income from a partnership does not count towards your qualifying income, unless you receive disguised investment management fees or income based carried interest.
If you are a beneficiary of a bare trust
Any property or trading income that you are entitled to will count towards your qualifying income.
If you are a beneficiary of an interest in possession trust
Any property and trading income that is paid directly to you and bypasses the trustees will count towards your qualifying income.
From helping you choose the right cloud accounting software for the job to answering your tax-related questions, or helping you prepare your tax returns, accountants are best placed to help you and your business succeed with Making Tax Digital. Here at TBL Accountants, our team of experts are trained to ensure your accounts are fully compliant and we are committed to helping local businesses migrate to MTD as easily as possible.
If you are unsure of when your business should be submitting VAT returns, or whether you should have already registered for MTD altogether, we can help you. Get in touch with us and our team will provide the support you need to get started with Making Tax Digital.
TBL Accountants are your local accountancy firm operating in Billericay, Southend, and across Essex. We specialise in a variety of services as personal, business, and charity accountants. Want to find out more? Get in touch with our team today.
According to HMRC, Making Tax Digital is designed to “make it easier for individuals and businesses to get their tax right and keep on top of their affairs.” Going paperless is also a more sustainable and streamline solution to filing tax returns, with aims to be a more transparent and accurate way of dealing with accounts.
Yes, for now. From April 2024, MTD will be rolled out for Income Tax Self Assessment (MTD for ITSA). Businesses and landlords with an annual turnover above £10,000 will need to register for MTD for ITSA from April 2024.
MTD for Corporation Tax will not be mandated before April 2026 at the earliest.
HMRC will not be making software available, so you will have two options:
1, MTD for Income Tax Self Assessment compliant software that will enable you to report data as per MTD rules
2, Bridging software which works with non-MTD compatible software (such as Spreadsheets) so you can submit the necessary information to HMRC digitally at the end of each quarter and at the end of the year.
There are some exemptions to Making Tax Digital. On the launch of Making Tax Digital, these exemptions were announced “on the basis of digital exclusion”, with factors including:
Plus, any business that is already exempt from online filing for VAT will remain so under MTD without having to reapply. There are more details on exemptions here.
MTD for income tax will be effective from 6 April 2024 for all unincorporated businesses i.e. sole traders, partnerships, landlords etc. irrespective of when their current accounting period ends.
You can view the filing deadlines for MTD for income tax here.
Businesses must file their first MTD return for the VAT quarter starting on or after 1 April 2022.
HMRC will aim to introduce Making Tax Digital for Corporation Tax from April 2026.
If you don’t comply with the rules and meet Making Tax Digital deadlines, you could face a fine.
From January 2023, HMRC is moving to a points-based system so that Making Tax Digital for VAT penalties are only given to those who regularly make mistakes and miss deadlines. The new system means taxpayers who make the occasional error will not be penalised.
Points are calculated based on how regularly you submit. You can find more information about penalties here.
If you are a business, you can sign up to Making Tax Digital with your existing government gateway ID, or you can set up a new one if you don’t have an ID.
Here at TBL Accountants, our team of experts are trained to ensure your accounts are fully compliant and we are committed to helping local businesses migrate to MTD as easily as possible.
Contact us to find out how we can support you with registering for MTD
Our friendly, experienced team can support you on the road to Making Tax Digital. If you are looking for a reliable accountant or you are an existing client moving to MTD, then get in touch with our team today.
