HMRC’s Making Tax Digital plans involve getting small businesses and the self-employed to complete digital tax records and returns, with the eventual aim of going completely paperless, and from April 2024, Self-Assessment taxpayers will need to comply with Making Tax Digital for income tax. MTD will apply to taxpayers who file income tax Self Assessments for business or property income of more than £10,000 a year.

Both sole traders with income from one business and landlords who rent out UK property (excluding furnished holiday lettings) can sign up.

You’ll need to use compatible software to keep records and send an income and expenses summary to HMRC every three months. You’ll be able to see estimates of how much tax you’ll owe.

At the end of the accounting year, you’ll send a final report and your tax for the year will be calculated. This is the point at which you’ll claim any allowances and reliefs.

While the government has estimated costs of £70 a year over four years for small businesses implementing Making Tax Digital, the Institute of Chartered Accountants in England and Wales puts it at £1,250. We can reduce this considerably.

Are you ready for Making Tax Digital?

Talk to us and let us quote and help you get ready.