The end of January heralds a rush to submit Income Tax Self Assessment forms as the last minute.com community realise the submission deadline is imminent.
2024 was to have seen the introduction of Making Tax Digital for ITSA but this has been delayed until 2026. However getting ready for the change over is really not something that should be left to the last minute. Under MTD for Income Tax, sole traders and landlords will need to keep and maintain digital records and use MTD compatible software to manage, maintain and send updates to HMRC. If your earnings are above £50,000 the new rules will apply from April 2026, above £30,000 the rules apply from April 2027. Earnings below £30,000 are exempt from the changes for the time being although this could change.
If you are a sole trader or landlord keeping your records on paper or spreadsheets you should really be looking to switch to bookkeeping software. It will make your reporting more accurate and ensure you are compliant with digital record keeping requirements. It may seem a daunting prospect but Xero Software Accounting is incredibly user friendly and is fully compliant with HMRC. Making the switch sooner rather than later will have you prepared and ready for MTD as well as benefiting from all the Xero features that help you grow and run you business efficiently.
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