Making Tax Digital or MTD is due to be phased in from April 2026. This change will affect many self-employed as well as those with income from property. If you think this may affect you, consider how to be best prepared for the change.
Will It Affect Me?
Whether you will need to use MTD will depend on your income. For the initial phase, it is only for those with an income of over £50,000 for the tax year 2024-2025, with those earning over £30,000 in 2025-2026 joining the scheme in 2027. Additionally, if you do not have a national insurance number, such as non-residents, you will be exempt from joining MTD income tax.
If you are not sure if you need to join MTD, take advice from an accountant. If you do not already have an accountant, you can find one with an internet search for your area, such as accountants Bath. This will give results like https://chippendaleandclark.com/accountants-near-me/bath/.
Continual Monitoring Is Unnecessary
You do not need to continually monitor your income, as it will be based on your combined gross income or turnover. As long as this is reported correctly on your self-assessment tax return, HMRC will contact you when you need to join. However, even if HMRC does say you need to join, check to make sure this is based on the relevant tax year.
Check Your Software
You may use different accounting software for your quarterly reports and your tax return, depending on what you find most effective. However, both will need to be MTD-compatible.
