MCMANUS HALL
  • Services
    • Limited Company Accounts
    • Taxation Services
    • Self Assessment
    • CIS
    • Registered Charities
    • Xero
    • Growth Management
    • Payroll Services
    • Bookkeeping and VAT
    • Business Consultancy
    • Company Secretarial
  • Cloud Software
  • News
  • Pricing
  • Contact
  • Login
Latest News

Lack of awareness around Making Tax Digital

6/6/2025

 
With less than a year until quarterly filing under Making Tax Digital (MTD) is introduced, a recent survey has found that nearly one-third of sole traders are oblivious to the changes.
Furthermore, for the other two-thirds of sole traders who are aware of MTD, there is a large proportion who have not made any preparations. With an estimated three million sole traders, this translates to a worrying number who are not ready for MTD. The survey did not cover landlords.

From April 2026, MTD will become mandatory for sole traders and landlords with an annual income of more than £50,000. The threshold will drop to £30,000 in 2027 and to £20,000 in 2028.

Generational gap
The number of self-employed people has fallen considerably in recent years, although numbers have started to pick up again. Much of the recent increase is due to people working beyond the traditional retirement age, with nearly a quarter of self-employed people now aged 60 or older.

It is the older cohort of sole traders who may struggle the most with MTD. The survey found that those in the 25-to-34 age group were more likely to be well-prepared for April 2026, with a majority feeling the changes will have a positive impact on their approach to filing taxes.
​
Impact
Some sole traders have deliberately kept their income below £90,000 so that they do not have to worry about VAT registration:
  • Although they will be able to use a three-line account approach based on total income and expense figures, the additional administration requirements are unlikely to be welcomed.
  • The deadlines for quarterly MTD submissions are considerably tighter than the self assessment tax return deadline of 10 months; with just over a month in which to make each quarterly submission.
  • Late submissions will lead to penalties.
 
One loophole to delay mandatory MTD is to change a sole tradership into a partnership. Rather than, for example, employing a spouse, civil partner or family member, that person could be brought in as a junior partner. MTD requirements would then be postponed, possibly for at least three years.
 
HMRC’s guidance to find out if and when you need to use MTD for income tax can be found here.

Comments are closed.

    ​Archives

    June 2025
    May 2025
    April 2025
    March 2025
    February 2025
    January 2025
    December 2024
    November 2024
    October 2024
    September 2024
    August 2024
    July 2024
    June 2024
    May 2024
    April 2024
    March 2024
    February 2024
    January 2024
    December 2023
    November 2023
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    February 2020
    January 2020
    November 2019
    October 2019

Powered by Create your own unique website with customizable templates.
Photos from Pam loves pie, Homedust, wuestenigel, Patrick Cannon Tax Barrister, wuestenigel, Brett Jordan, wuestenigel, raisin_raisin, wuestenigel, SME Loans, Alexandre Prevot, Jirka Matousek, wuestenigel (CC BY 2.0), wuestenigel, Jirka Matousek, moneybright, aronbaker2, foundin_a_attic, QuoteInspector.com, wuestenigel, Kate#2112, Semtrio, Rawpixel Ltd, itmpa, GoSimpleTax, DPP Law, UC Davis College of Engineering, 401(K) 2013, REM Photo ~ Sketchy Internet, Chris Yarzab, focusonmore.com, focusonmore.com, willbuckner, EpicTop10.com, Tony Webster, wuestenigel, B Rosen, London Less Travelled
  • Services
    • Limited Company Accounts
    • Taxation Services
    • Self Assessment
    • CIS
    • Registered Charities
    • Xero
    • Growth Management
    • Payroll Services
    • Bookkeeping and VAT
    • Business Consultancy
    • Company Secretarial
  • Cloud Software
  • News
  • Pricing
  • Contact
  • Login