HRMC has confirmed that Making Tax Digital (MTD) will be introduced from 6 April 2026. This new system will digitise the income tax system in the UK.
The first taxpayers to be mandated to use the new system will be those who are self-employed and/or have property income with a total gross turnover of over £50,000. HMRC will also be in contact with these taxpayers in the next few weeks to advise them that they will now be required to use this system.
If you will be affected by this change, preparing your business now will make the transition easier for you and enable you to be ready April 2026 when the system goes live.
WHAT DO YOU NEED TO DO
1) Keep Digital Records
You will need to keep digital records of all your business and property income and expenses. Digital record keeping will involve you recording the date, type and amount of income and expenditure relating to your self-employment and/or property business. These records can be kept in specific MTD software, or on spreadsheets.
2) Send quarterly updates to HMRC
You will be required to digitally submit the income and expenses of each relevant business to HMRC on a quarterly basis. This will mean that there will be 4 in-year returns to be reported to HMRC digitally using a HMRC approved software solution.
3) Submit a Final Declaration (Tax Return)
At the end of the tax year, a Final Declaration (Tax Return) will be required to be completed and filed by the normal 31 January filing deadline for the tax year. This will be prepared on the same basis as your current annual tax return.
Tax payment dates have not changed, and your final tax payment will still be due by 31 January following the end of the tax year. Payments on account, if applicable, will still be due by 31 January and 31 July respectively
Given the fast-approaching deadline we recommend that you consider how your business will comply with the requirements of MTD.
GMcG SOLUTIONS
We will be offering clients MTD software packages from basic software provision via our current suppliers, through to provision of training to enable clients to complete the reporting requirements themselves, or a full bookkeeping and filing service where we will prepare the quarterly records and submit the quarterly updates for clients.
We will continue to prepare and submit clients’ annual Tax Returns which will now include the preparation and submission of the final declaration.
For more information or guidance, contact any member of our experienced GMcG Tax Team at:
Belfast - 028 9031 1113
Lisburn - 028 9260 7355
Portadown - 028 3833 2801
