Making Tax Digital will mean something to you!
HMRC are changing the way Self-Assessments will be submitted for the tax year 2026-27. They’re assessing income reported in THIS tax year, so if your turnover is above £50,000 in the 2024-25 tax year, you will receive a letter from HMRC telling you about the changes.
Here’s a heads-up though and a bit of reassurance that you’re in great hands with LMO Bookkeeping Limited – we’re already ready and have our solutions mapped out 😊
Here are the key points about Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA), which is set to start in April 2026:
Who it affects: Sole traders and landlords with an annual income over £50,000 (threshold lowers to £30,000 in April 2027).
What changes: Instead of a yearly tax return, you'll need to keep digital records and send updates to HMRC quarterly.
How to comply: Use HMRC-approved software to record income and expenses, submit quarterly updates, and send a final year-end declaration.
Deadlines:
Quarterly updates due every 3 months.
End-of-year declaration replaces the Self Assessment tax return.
Partnerships & lower earners: Not included yet, but expected to follow later.
Why it's happening: Aims to make tax reporting more efficient and reduce errors.
If any of this sounds scary and uncomfortable, don’t worry - you’re not alone! LMO Bookkeeping Limited is here to support you in the way that works for you.
We’re highly qualified and are in great relationships with software providers that will be providing excellent customer service to navigate these changes. Yes, it will involve a few more bookkeeping meetings and possibly more costs involved in getting those quarterly returns submitted. With cash management, regular chats and uploading documents digitally you’ll feel supported through these changes and will have an excellent understanding about your tax responsibilities more regularly.
Now’s the time to feel confident with bookkeeping software – get in touch to find our how we can help.
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