Are you a Sole Trader or Landlord?
Are you a sole trader or landlord?
New Government plans known as ‘Making Tax Digital for Income Tax Self Assessment’ (MTD for ITSA) come into force on 6th April 2026 and require businesses and landlords with qualifying income (gross turnover for sole traders or income from rental if you are a landlord) to maintain digital records and submit returns to HMRC on a quarterly basis. From April next year individuals with such income of more than £50,000 will need to do this. From April 2027 the threshold is reduced to £30,000.
We understand that this may mean quite a change for some of our businesses and landlords as to how they keep their records, but we are here to help. Records must be maintained and submitted through accounting software approved by HMRC so you will need to choose and set this up before your compliance date. We are recommending our clients use Xero, although other software is available. This is a product we use in our practice and they have developed a package specifically for MTD for ITSA known as ‘Xero Simple’. There is a free trial available and then a small monthly fee; records of receipts and invoices can be kept digitally and submitted directly from the software to HMRC. You can find out more here:
Introducing Xero Simple, a plan to support you with Making Tax Digital for Income Tax – Xero Blog
There is also a software search facility available on gov.uk using this link:
Find software that works with Making Tax Digital for Income Tax – GOV.UK
If you would rather we took care of this for you, that’s fine. We will just need you to submit your records to us each quarter and we will do the rest.
We will be contacting you about this in the next few months to help you prepare for the new requirements but please contact us if you have any queries about how this will work.