Throughout 2025, we published several blogs about the changes to Making Tax Digital (MTD) for Income Tax coming into place from April 2026. If you didn’t read them then, it’s certainly worth taking the time to read them now (and this blog, of course!):
- The countdown to MTD for Income Tax is on…
- How Accounting Clarkes can help you prepare for MTD for Income Tax
Are you focused on the self-assessment deadline for 2024/2025?
As we write this blog, our team are finalising the last of our clients’ 2024/2025 tax returns. Where possible, we encourage our clients to get their self-assessments completed earlier in the tax year. There are many reasons for this.
For those who pay on account and submit their return before the payment due in July, it means that your July payment is accurate and not estimated on the previous year’s tax return. If you’ve had a more profitable year, this will potentially increase your expected July payment, but it will be less of a shock to your cashflow with a much larger payment due in January.
The self-assessment deadline is close to Christmas and New Year, which can be, for many, a very busy time of year. Choosing to get it submitted earlier means it’s one less thing on your to-do list when there’s lots of festivities taking place.
If you still have your 2024/2025 tax return to submit, our advice is to make it your priority today! You’ll avoid late submission fines and potentially interest penalties.
Once it’s submitted, we’d love for you to continue reading this blog and helping to get prepared for 2025/2026.
Top Tips for Preparing for MTD for Income Tax
Tip #1 – Know when MTD for Income Tax applies to you
Your 2024/2024 tax return is key here. The income that you declare in 2024/2025 dictates your MTD position for the next 3 years. If you are a sole trader or landlord who earned £50,000 or more in 2024/2025, MTD for Income Tax applies to you from April 2026.
Tip #2 – Start using MTD-compatible software
Assuming that MTD applies to you from April, you have two months to choose and start using MTD-compatible software. If you don’t currently use any accounting software, this could be a steep learning curve. It is critical that the software you adopt is MTD-compatible, as you are going to be submitting quarterly updates to HMRC of your income and expenses.
Tip 3 – Decide if you or your accountant will be submitting the quarterly updates
The changes to MTD for Income Tax have been met with some reservations that quarterly updates will increase time spent on admin, and accountancy costs. The aim of MTD is to help business owners manage their cash flow and tax liability more effectively and reduce business admin.
By using MTD-compatible software, you’ll be able to submit your quarterly updates to HMRC with the touch of a button. It’s simply taking the data that’s already in your account.
If you struggle to allocate or justify the time you spend on accounting, then this is the perfect opportunity to consider outsourcing your bookkeeping and accounts to an accountant.
Tip 4 – Be prepared for teething problems
Although quarterly updates have already been introduced for VAT, we wouldn’t be surprised if there were the odd teething problems in the first year of MTD for Income Tax. We will be taking care of all those problems for our clients, where we will be managing the quarterly updates, and we’ll offer as much guidance as we can for those who will be submitting them themselves.
Is it time to outsource your self-assessment?
We are actively signing up clients who meet the requirements for MTD for Income Tax from April 2026, and who want to be prepared for their 2025/2026 self-assessment requirements.
Call 01252 612484 or email gillian@accountingclarkes.co.uk to book a discovery call in the coming weeks.
