Making Tax Digital – Getting Started
Following on the first blog of our ‘Making Tax Digital for Income Tax’ series, this blog is targeted at those of you who have determined that you will be impacted by the changes coming in April 2026 (specifically, those with a combined sole trade turnover and rental income exceeding £50K).
Why Should You Care?
Good question! Here are a few reasons why Making Tax Digital (MTD) is a game changer:
- Less Paperwork: No more being overwhelmed by a mountain of receipts and invoices. Everything will be digital, leading to less clutter and more organization.
- Accuracy: Digital records minimize the chances of errors. Say goodbye to those troublesome mistakes that could result in fines.
- Real-Time Update: You’ll be able to monitor your tax situation in real time. No more waiting until the end of the year to discover where you stand.
Step 1
Consider your strategy and implement it before April 2026 to avoid any last-minute stress. As mentioned in Blog 1, you will be required to keep records digitally and make quarterly submissions.
At this point, your primary consideration should be how comfortable you are with using a digital system for recording your income and expenses. Below are some suggested strategies based on your comfort level with this change:
Outsource Completely: If you are not comfortable using computer systems or digitizing your records, you can pay to alleviate the burden. Here at HSJ, we offer a service that handles all of this for you. All you need to do is provide us with the information each quarter, in whatever format you currently have it (even paper). We will digitize the information and make the quarterly submissions on your behalf.
Choose Your Software: If you feel completely at ease with new systems and are confident in managing your own bookkeeping, consider which software you would prefer for making the quarterly submissions. If you’re unsure about which software to choose, please reach out to us; we’d be happy to advise.
Complete Your Own Bookkeeping with Help: If you are fairly confident or believe you could manage this yourself with some training, contact HSJ. We can develop a tailored approach for you, which may include training to build your confidence in completing your quarterly submissions independently, or perhaps allowing you to record transactions while we review your work each quarter and handle the submissions.
Whatever level of support you require, we can tailor a solution for you. The important first step is to assess your comfort level and determine what kind of support you will need to fulfil your obligations. This will enable you to have the right conversations about the next steps to take.
We’re here to help you
Contact us today to discuss what making tax digital means for you.