Home » Self Employed – Major Changes To The Way You Report Your Income Tax

Self Employed – Major Changes To The Way You Report Your Income Tax

Making Tax Digital (MTD) for income tax will be mandatory from April 2023. It applies to the self-employed and partnerships with income over £10,000 and means these businesses will be required to:

  • Maintain their records on a software spreadsheet or software product – paper records will no longer meet the requirements of the tax legislation.
  • Submit information to HMRC each quarter based on these electronic records.
  • Submit four quarterly updates, an end-of-period statement, and a final declaration to HMRC – this will replace the Self-Assessment tax return, which will no longer be required.

The requirement to keep digital records will not mean that businesses will have to scan and store invoices and receipts digitally. Businesses can continue to keep documents in paper form if they prefer, but each individual transaction (not summaries) will need to be recorded and stored digitally.

We are here to help

In business the only constant is change and MTD is just another change in a long list of changes to taxes over the last few years.

If you still prepare manual records, and you are not interested in going online and using a software product, then you have two choices:

  1. Prepare your own spreadsheet of your records
  2. Pay us to complete your spreadsheet

Prepare your own spreadsheet of your records

We can provide you with a spreadsheet and the training needed for you to complete this. Send it to us once a quarter and we will check and submit it for you.

This is the most cost-effective method as you can do the work as you go along.

Pay us to complete your spreadsheet

We can prepare your spreadsheet for you each quarter from your records and submit it for you.

If you are already on a spreadsheet we can help make sure it is MTD Income Tax compliant, simply submit this to us once a quarter for checking and submission

If you are on software already the chances are this will be compatible or will be compatible when the time comes. So no further action needed at this time.

An opportunity to get more out of your accounts

If you are using a spreadsheet or keeping manual records, then now might be a good time to set up a software package such as Xero.com. We can help you get a better grasp of your finances by using the latest bookkeeping software.

To discuss MTD Income for Income Tax Call us today on 01634 406166