Making Tax Digital for Income Tax: What Sole Traders and Landlords Need to Know

 

Making Tax Digital (MTD) is part of the UK government’s long-term strategy to simplify the tax system and reduce errors by requiring digital record-keeping and online tax submissions. While MTD for VAT has already been implemented, the next major phase – MTD for Income TaxSelf-Assessment (ITSA)  is set to come into effect from 6 April 2026.

This change will have a significant impact on sole traders and landlords, especially those unfamiliar with digital accounting systems. Understanding what’s required and preparing early can help ensure a smooth transition.

Who Will Be Affected?

From 6 April 2026, Making Tax Digital for Income Tax will apply to:

• Sole traders earning more than £50,000 annually
• Landlords with property income exceeding £50,000 per year

From April 2027, the threshold will extend to those earning between £30,000 and £50,000.

If your total income from self-employment or property (or both combined) meets these thresholds, you will be legally required to follow the MTD rules.

What Will Change?

Under MTD for ITSA, you will no longer be able to file a single Self Assessment tax return each year in the traditional way. Instead, you’ll need to:

1. Maintain digital records using HMRC-approved software
2. Submit quarterly updates to HMRC (every three months)
3. Submit an End of Period Statement (EOPS) after the end of the tax year
4. File a Final Declaration (replacing the current annual Self Assessment)

This new process means you’ll be interacting with HMRC at least five times a year, rather than once.

Why the Change?

The aim of Making Tax Digital is to reduce tax errors caused by manual data entry and late submissions. By digitising tax reporting:

• HMRC receives more timely and accurate information
• Individuals get a clearer picture of their ongoing tax position
• Errors and penalties due to missed deadlines can be minimised
• The process becomes more efficient for both taxpayers and HMRC 

How to Prepare

With the 2026 deadline approaching, it’s important to take action early. Here are a few steps sole traders and landlords can take:

1. Review your income – Check whether your income exceeds the relevant threshold.
2. Choose MTD-compatible software – HMRC has a list of approved tools like Xero, QuickBooks, and FreeAgent.
3. Start keeping digital records – Even before the requirement starts, it’s wise to shift to digital bookkeeping now.
4. Speak to an accountant – A professional can help you get ready, advise on software, and ensure you remain compliant.
5. Understand the quarterly deadlines – Familiarise yourself with when and what to submit during the year. 

FAQs About MTD for Income Tax

Does MTD replace Self Assessment?
Yes, for those who meet the criteria. Your final declaration replaces the traditional annual Self Assessment return.

Are payment dates changing?
No. Deadlines remain:

• 31 January – Final payment for the year
• 31 January & 31 July – Payments on account (if applicable)

Will income under £20,000 be included in MTD later?
As of now, there’s no confirmed rollout for those under the threshold. However, the Government is exploring this possibility.

What happens if I don’t comply with MTD?

Failure to comply could result in penalties, including fines for late submissions or failure to maintain proper digital records. HMRC is expected to apply a points-based penalty system for non-compliance.

How can an accountant help with MTD?

An accountant can:

• Help choose the right software
• Train you to use digital tools
• Ensure timely submissions
• Review your records for accuracy
• Provide strategic tax planning advice

MTD for Income Tax is a major change for sole traders and landlords, but it also presents an opportunity to modernise your financial processes. By preparing now, you’ll not only avoid last-minute stress but also benefit from more accurate, timely insights into your tax position. Contact Doshi Accountants today on 020-8239-4999 for expert support with MTD, tax planning, and digital accounting solutions.

 

Accounting Help in Coventry: What Self-Employed Professionals Really Need

Self-employment gives you control over your work, but managing your own accounts often takes up valuable time. Whether you are a freelance designer, a local consultant, or a sole trader in Coventry, dealing with taxes, expenses, and bookkeeping can quickly become a burden.

That is why more self-employed professionals are choosing to work with the best accountants in Coventry who understand their needs and offer flexible support.

 
Why Accounting Support Matters

Many individuals start their business journey by managing everything themselves. As the workload grows, so does the complexity of financial management. Working with experienced accountants in Coventry ensures that you remain compliant with HMRC, avoid unnecessary penalties, and make informed financial decisions.

The right accountant can help you:

• Track your income and expenses

• Submit accurate Self Assessment tax returns

• Plan for tax payments in advance

• Understand what you can legally claim as business costs

Reliable advice can help you avoid costly mistakes and give you peace of mind.

Remote Support with Local Knowledge

You do not need a physical office nearby to receive expert support. Today, many accountants who serve clients in Coventry offer services remotely, while still providing personal consultation when required.

This flexibility means you can get high-quality accounting support from professionals who understand the local business environment, even if they are not based in a city centre location.

Tailored Services for Coventry’s Self-Employed

Every self-employed individual has different needs. Accountants in Coventry typically offer customised services, such as:

• Tax return preparation and filing

• Bookkeeping and accounting software setup

• VAT registration and submissions

• Help with choosing between sole trader and limited company structures

• Advice on allowable expenses and financial planning

These services are designed to support small business owners and freelancers who want clear, practical guidance.

Choosing the Right Accountant

When selecting an accountant, look for someone who offers transparent pricing, prompt communication, and experience working with small businesses. It is also useful to choose someone who is familiar with digital accounting tools like QuickBooks, Xero, or FreeAgent.

Accountants in Coventry who offer flexible communication—through phone, video calls, or local meetings—can provide the right balance of convenience and personal service.

Running your own business in Coventry can be rewarding, but managing your accounts should not take your focus away from growth. Whether you need help with tax returns, business expenses, or setting up a better system for tracking your finances, accountants in Coventry can offer the support you need.

By choosing the right accountant, you gain more time, more clarity, and better control over your business finances.

Accountants for Startups in Hammersmith

Starting a new business can be an exciting yet overwhelming experience, especially when it comes to managing finances. From registering your company and setting up accounting systems to staying compliant with HMRC regulations, there’s a lot to consider. That’s where experienced Hammersmith accountants for startups can make all the difference.

Whether you're launching a tech firm, creative agency, or retail business, having a knowledgeable accountant by your side from the outset provides you with the financial clarity and strategic guidance needed for long-term success.

Tailored Accounting Support for New Businesses

Startups often operate on tight budgets and limited resources. A professional accountant in Hammersmith can help you set up cost-effective accounting solutions that are scalable as your business grows. Services typically include:

• Company formation assistance
• Business structure advice (sole trader, partnership, or limited company)
• HMRC registration (PAYE, VAT, Corporation Tax)
• Bookkeeping and cloud accounting setup
• Budgeting and cash flow forecasting
• Tax planning and compliance

Choosing a local accountant means you get dedicated support from someone who understands the business environment in Hammersmith and the wider London area. They’re familiar with local regulations, networking opportunities, and industry-specific requirements that can benefit your new venture.

Keeping You Compliant from Day One

Compliance is crucial for startups. Failing to register on time or missing tax deadlines can result in penalties that affect your cash flow and credibility. Hammersmith accountants ensure you stay on top of all legal obligations from the beginning. They assist with:

• Filing accounts with Companies House
• Preparing and submitting tax returns to HMRC
• Setting up payroll for employees
• Advising on allowable expenses and reliefs

With their expertise, you can avoid common pitfalls and focus on running your business.

Financial Insights That Drive Growth

Beyond compliance, accountants offer valuable insights into your business’s financial health. From analysing performance data to advising on funding options, they can help you make informed decisions. Many accountants in Hammersmith work with startups across various sectors, giving them the experience needed to provide relevant, practical advice.

They can help you prepare for investor meetings, pitch your business idea with confidence, and maintain accurate financial records that demonstrate viability and potential for growth.

Cloud-Based Solutions for Modern Startups

Modern accountants often work with cloud-based software such as Xero, QuickBooks, or FreeAgent. These tools provide real-time access to your financial data, automate routine tasks, and simplify collaboration with your accountant.

Startups benefit from streamlined invoicing, bank reconciliations, and expense tracking — all accessible from any device. Your Hammersmith accountant can recommend the most suitable system and offer training to get you started.

Get Your Startup on the Right Track

If you’re a startup based in or around Hammersmith, partnering with a local accountant can provide you with the tools, confidence, and financial control needed to thrive. From the early planning stages to scaling your operations, their expert support ensures your business is built on a solid foundation.

Affordable Birmingham Bookkeeper for SMEs

 

 

Running a small or medium-sized enterprise (SME) comes with numerous responsibilities, and managing finances effectively is one of the most critical. Whether you’re just starting out or looking to streamline operations, having a reliable bookkeeper can make all the difference. For businesses in Birmingham, finding an affordable and skilled bookkeeper is key to staying compliant, organised, and financially healthy.

Why SMEs in Birmingham Need a Bookkeeper

Many SME owners try to manage their own books, especially in the early stages. While this might seem cost-effective initially, it often leads to errors, missed deadlines, and a lack of financial clarity. A professional bookkeeper helps prevent these issues by taking care of day-to-day financial tasks such as:

• Recording transactions accurately
• Managing invoices and receipts
• Reconciling bank statements
• Preparing financial reports
• Assisting with VAT returns and compliance

By outsourcing bookkeeping, business owners gain more time to focus on growth, customer service, and strategy rather than getting bogged down in numbers.

Affordable Bookkeeping Solutions for Every Business

Affordability doesn’t mean compromising on quality. Birmingham has a growing network of experienced bookkeepers who offer flexible pricing plans tailored to the size and complexity of your business. Whether you operate as a sole trader, partnership, or limited company, an affordable bookkeeping service can be designed to match your budget and needs.

Most bookkeepers offer:

• Monthly fixed-fee packages
• Pay-as-you-go options
• Customisable services based on your business size or turnover

This flexibility ensures that SMEs aren’t paying for services they don’t need, making it a cost-effective solution in the long run.

Local Expertise You Can Trust

Choosing a bookkeeper in Birmingham means you benefit from local knowledge and accessibility. A Birmingham-based bookkeeper understands regional business practices, local tax requirements, and industry-specific challenges. This insight allows them to provide practical advice that’s relevant to your business and its location.

Additionally, working with someone local means easier communication, whether that’s through in-person meetings or quick support when needed. Building a relationship with your bookkeeper fosters trust and ensures better alignment with your financial goals.

Supporting Business Growth Through Better Financial Management

A professional bookkeeper does more than just record numbers they play a crucial role in helping your business grow. With accurate records and timely reports, you can:

• Understand your cash flow position
• Plan ahead for tax payments
• Make informed decisions based on real-time data
• Spot opportunities to reduce costs or increase profit margins

Many bookkeepers also work closely with accountants, helping you prepare for year-end accounts or audits, and ensuring your financial records are always in order.

Choose the Right Bookkeeper for Your SME

When selecting an affordable bookkeeper in Birmingham, look for qualifications, experience, and client reviews. It’s also important to choose someone who uses modern bookkeeping software like Xero, QuickBooks, or Sage, which improves efficiency and provides better access to your financial data.

Hiring an affordable Birmingham bookkeeper for your SME is not just an expense it’s an investment in your business’s financial health. With the right support, you can save time, reduce stress, and make smarter decisions that drive your business forward.

Corporation Tax Planning Strategies Before Your Year-End

Most businesses wait until tax deadlines are close before looking at their finances—but that’s often too late to reduce Corporation Tax. Effective Corporation Tax planning happens before your year-end, not after it. With the right approach, you can make smart financial decisions that lower your tax bill and improve business efficiency.

This guide covers simple and legal strategies UK limited companies can use to reduce Corporation Tax liability. If you’re not yet clear on how Corporation Tax works or what the filing process looks like, you may want to review this complete guide to Corporation Tax return filing before moving ahead

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1. Advance Business Expenses Where Possible

Planning any major purchases or recurring costs for early next year? Buying them now—before your year-end—means you can claim the expense in the current accounting period.

Eligible business costs include:

• Office equipment and software

• Prepaid business rent or insurance

• Marketing, advertising, and subscriptions

These costs reduce taxable profit and therefore lower the Corporation Tax due.

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2. Make Employer Pension Contributions

Employer contributions to pensions (for directors or staff) are classed as allowable business expenses and are deductible for Corporation Tax purposes.

Ensure contributions are:

• Paid before the year-end

• Within the annual allowance limits

• Properly documented

This strategy supports retirement savings while reducing your current tax bill—an ideal step in professional Corporation Tax planning.

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3. Optimise Director Salary and Dividends

How you pay yourself as a director can have a major tax impact. A low salary (within personal allowance limits) combined with well-timed dividends often results in the most tax-efficient outcome.

Before your year-end, consider:

• Is your salary aligned with National Insurance thresholds?

• Could paying a dividend now reduce higher-rate tax later?

• Have all dividends been formally declared and recorded?

Getting year-end tax advice from a qualified accountant helps ensure you don’t overpay Corporation Tax—or personal tax.

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4. Use Capital Allowances and the AIA

If you're planning to invest in machinery, IT equipment, or commercial vehicles, you may qualify for the Annual Investment Allowance (AIA), which allows full tax relief in the year of purchase (up to £1 million).

Making these purchases before your year-end means faster tax relief and lower taxable profits for the current year.

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5. Write Off Bad Debts

Outstanding invoices that are unlikely to be paid should be reviewed before the year ends. If reasonable efforts have been made to collect the amount and it’s genuinely irrecoverable, you can write it off—reducing profit and tax owed.

Make sure proper documentation and communication records are kept to justify the write-off.

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6. Carry Out a Year-End Review

A pre-year-end financial check can uncover:

• Unclaimed expenses

• Stock that has fallen in value

• Inaccurate asset values

• Missed pension or salary adjustments

A tax accountant offering Corporation Tax planning services in the UK can help you identify these opportunities in time to take action.

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Waiting until tax deadlines are near often limits your options. Instead, act now—while you still have time to make strategic decisions. Whether it’s claiming allowances, adjusting payments, or reviewing your records, proactive Corporation Tax planning helps you stay compliant and save money.

For tailored year-end planning support, it’s worth speaking to a trusted tax professional who understands your business and UK tax laws in detail.