Are You Ready for Making Tax Digital?
If you're one of the 4.4 million self-employed people in theUK who thought Making Tax Digital (MTD) just meant ditching paper tax returns, you're not alone. And don’t worry, we’ve got your back.
At Happy Days, we help self-employed business owners understand their finances and prepare for changes like MTD. As our name suggests, we keep things positive and practical, so you can stay focused on running your business, not stressing over tax rules.
This is the first in a series of guides to help you getready for MTD. Let’s break it down.
What is Making Tax Digital (MTD)?
MTD is the government’s plan to move tax reporting online and make it more frequent.
Instead of doing one big tax return at the end of the year, you’ll need to:
- Keep digital records of your income and expenses
- Send updates to HMRC every 3 months
- File a final tax return at the end of the year (with most of the info already filled in)
This is meant to make tax simpler, cut down on errors, and reduce the end-of-year rush.
Will MTD Affect Me?
If you're self-employed or a landlord, most likely yes, but not all at once. It depends on how much you earn.
Here’s when it kicks in:
- April 2026 – If you earn more than £50,000
- April 2027 – If you earn more than £30,000
- April 2028 – If you earn more than £20,000
What Do I Need to Do?
Here’s what MTD involves:
- Use HMRC-approved software to keep your business records
- Send quarterly income and expense updates to HMRC
- File a final annual return and pay any tax due by 31 January the next year
It’s a good idea to get set up early to avoid any last-minute stress or penalties.
I Need to Sign Up – What Now?
Take a deep breath, it’s all manageable.
HMRC has a step-by-step guide to walk you through the sign-up process. And if you’re unsure, speak to your accountant or give HappyDays a call. We’ll help you get sorted and stay on top of it all.
