Making Tax Digital for Income Tax: Don't Get Caught Out!
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Now that the Self-Assessment deadline has passed, it's the perfect time to prepare for the future of tax reporting: Making Tax Digital for Income Tax (MTD for ITSA).
What is MTD for Income Tax?
MTD for Income Tax is a new system that requires businesses to keep digital records and submit tax information to HMRC more frequently. This means moving away from manual record-keeping and embracing digital tools.
Who is affected?
From April 2026: Individuals with an annual gross income of over £50,000 from self-employment and/or property letting will need to comply.
From April 2027: This will extend to those with an annual gross income of more than £30,000.
Later Phase: Individuals with an annual gross income of more than £20,000 will also be included at a later date.
What does it involve?
Keeping digital records: Maintaining accurate and up-to-date records of your income and expenses using digital software.
Quarterly updates: Submitting quarterly updates to HMRC about your business income and expenses.
Final declaration: Submitting a final declaration at the end of the tax year.
Benefits of preparing now
Avoid last-minute stress: By preparing now, you can avoid the last-minute scramble to comply with the new rules.
Reduce the risk of penalties: Early preparation can help you avoid potential penalties for non-compliance.
Improve efficiency: Digital record-keeping can streamline your bookkeeping and tax processes.
Gain a competitive advantage: Early adopters of MTD for ITSA may gain a competitive edge by improving their financial management.
How Cashtrak can help
At Cashtrak, we can guide you through the MTD for ITSA transition, including:
Assessing your current record-keeping practices.
Identifying any gaps in your current systems.
Selecting and implementing suitable accounting software.
Preparing for and submitting quarterly updates to HMRC.
Ensuring compliance with all MTD for ITSA requirements.
Don't wait until the last minute. Contact Cashtrak today to learn more about MTD for Income Tax and how we can help you prepare for the future of tax reporting.