What Is Making Tax Digital?
Making Tax Digital is a key part of the government’s tax administration strategy – a 10-year plan with the aim of building a ‘trusted and modern’ tax system.
Eventually, all businesses, sole traders and landlords will need to keep digital records via MTD compatible HMRC-approved software and submit their figures every quarter.
Who Is Affected by Making Tax Digital?
Sole traders and landlords will be affected by the MTD for ITSA, but the year that they need to implement these changes will depend on their earnings.For example, you will be affected from:
- 6th April 2026, if you have an annual business or property income of more than £50,000
- April 2027, if you have an annual business or property income of more than £30,000
- April 2028, if you have an annual business or property income of more than £20,000
How Will Making Tax Digital Change Self Assessment?
MTD for ITSA will bring the tax system closer to real time, which means replacing the annual self assessment with digital record keeping maintained throughout the year.
The new system will require quarterly submissions that will be due on the following dates:
- 7th August
- 7th November
- 7th February
- 7th May
These do not trigger payments – you will not be expected to make tax payments every quarter. They’re a progress snapshot of your records that will give you an estimated tax bill as you go along and can be corrected later on if needed.
After your fourth quarterly update, you will need to complete a final end-of-year declaration. This essentially replaces the traditional self assessment tax return and is where everything is checked, corrected and finalised.
This new process will come with some challenges. You’ll have to make sure you’re well organised, ensuring you complete your quarterly updates on time, or risk facing penalties.
Plus, you’ll need to keep on top of your digital records and send your quarterly updates before you are able to submit your final declaration.
How We Can Help
At Dolan Accountancy, we can support you with these new changes and give you confidence that you’re MTD ready and meeting your obligations correctly.
We can help with tasks such as:
- Setting up compliant digital bookkeeping through FreeAgent
- Managing your quarterly submissions
- Keeping your records accurate and up to date
- Ensuring you stay fully compliant and stress-free
Our MTD package includes everything you need and is just £25 +VAT per month.
If you’re an existing client, we charge an additional £10 + VAT per month to take care of your MTD needs.
If you have any further questions, our team of experts are available to answer any queries, so give us a call on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com. Alternatively, contact us via live chat.
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