*UPDATE* Making Tax Digital

What HMRC Has Announced:

HMRC has informed us that, starting from 6 April 2026, some sole traders and landlords will need to use Making Tax Digital for Income Tax (MTD for ITSA). This applies to those whose combined income from self-employment and property exceeds £50,000 in the 2024/25 tax year.

How HMRC Will Communicate Directly with You:

Crucially, HMRC will be writing directly to customers who may be affected by these changes. From April 2025, they will send letters to individuals whose 2023/24 tax returns show an income close to or above £50,000. This letter will clearly explain the potential need to use MTD for ITSA.

What This Means for You:

• HMRC Will Contact You: If your income falls within the potential threshold, you will receive a letter from HMRC in 2025.

• Prepare for Digital Record Keeping: MTD for ITSA requires using compatible software to keep digital records and submit quarterly updates.

• Early Preparation is Key: We recommend familiarising yourself with MTD for ITSA before it becomes mandatory.

• Optional Early Sign-Up: You can choose to sign up for MTD for ITSA early. This can help you get used to the system before it's required. Please let us know if you wish to sign up early.

• Two Sign-Up Options from April 2025:

  • Option 1: Sign up for the 2025/26 tax year to prepare.

  • Option 2: sign up for the 2026/27 tax year (the mandatory year).

We Are Here to Help:

We understand that changes to tax reporting can be concerning. We are here to support you through this transition. If you receive a letter from HMRC or have any questions about MTD for ITSA, please don't hesitate to contact us.