Making Tax Digital for Income Tax changes how many self-employed people and landlords report to HMRC. Instead of one annual return, you'll keep digital records and send short quarterly updates, followed by a year-end declaration.
Who is affected
The rules phase in based on your combined income from self-employment and property. If your qualifying income is above the threshold, you'll need to comply from the relevant start date. Employment income and pensions don't count towards the threshold.
What changes day to day
You'll need compatible software and records kept digitally throughout the year. Paper notebooks and spreadsheets that are copied in at year end won't meet the rules on their own. The upside is that you'll always know roughly what tax you owe.
How to prepare now
Open a separate bank account for your business or rental income if you haven't already, choose software, and start recording transactions monthly. A trial run before the deadline makes the switch painless.
How we help
Our Sole Trader plan includes MTD-ready software, set up and connected to your bank by Fairbank Partners. We'll submit your quarterly updates for you, so the only thing you need to do is snap your receipts.
