Act now: Making tax digital – one year to go

Do you run a sole trade business? Maybe you are a landlord with a few properties? If so, you may have heard of Making Tax Digital, but perhaps not. If you haven’t yet, you soon will as information will be coming from many directions including HMRC, software suppliers and accountants among others. 

Making Tax Digital will be starting from April 2026 so there is one year to go. It might seem like a long way off and there is plenty of time before you need to do anything but, as with many things in life, the earlier you start to deal with this the easier it will be.

What is Making Tax Digital?

It’s simply about keeping your records digitally and sending a quarterly update of your business records to HMRC. 

This may mean adapting the way you keep your records. You can no longer rely on sending a spreadsheet or taking a bag of invoices to your accountant once a year.

A range of digital systems are already available which can help you with meeting your obligations with HMRC and have the added benefit of helping you run your business or manage your properties. It doesn’t have to be complicated or expensive. And, if you don’t want to deal with all this yourself then help is available from accountants and bookkeepers.

Why is HMRC introducing Making Tax Digital?

HMRC are of the opinion that timely and accurate records will help to reduce the tax gap, in other words, tax that should be paid but isn’t because of mistakes or errors. By improving tax receipts this should benefit society as a whole. Digital systems can also free up time and help improve your cashflow.

What do I need to do?

Don’t be an ostrich! If your business income is more than £50,000 you will need to comply next year.

The threshold will reduce to £30,000 in 2027 and £20,000 in 2028, so all but the very smallest businesses will be coming into MTD eventually.

First steps are to:  

• Decide how much you want to get involved or if you need some help. 
• Investigate the digital systems on the market that will work for you. 
• Get some training. Many digital solutions have YouTube videos or you can have personalised training from your accountant. 
• Get started as soon as possible to get used to how the system works. 
• Ask if you need help. 

We can assist with your move to Making Tax Digital. For help, please contact a member of the tax team to discuss your requirements.