Making Tax Digital is coming and will soon be going live. It is a major shift that demands immediate preparation. The way you report your income is changing forever, and delay will only make the transition harder. The key points of Making Tax Digital are covered below
Overview
From 6 April 2026, if your self‑employment and property income exceeds £50,000 in 2024‑25, you will be required to use HMRC‑approved digital reporting.
Whilst the implementation has been delayed previously, unfortunately waiting until 2026 is now not an option. Furthermore, using compatible software is the only way to meet HMRC’s requirements. You must keep detailed digital records, file quarterly updates, and submit a final declaration each year.
Starting early gives you time to choose the right software, learn how to use it and embed new processes before the deadlines hit. Leave it too late and you risk rushed decisions, errors and unnecessary costs.
Why using software is mandatory
Using compatible software will keeps your records secure, accurate and always up to date. It links transactions, stores receipts and feeds data directly into HMRC reports. You'll gain instant insights into your profits, giving you the power to plan and act decisively
Furthermore, cloud systems (e.g. FreeAgent and Xero) will remind you of the key dates and help you file quickly. However, perhaps most importantly, without software, you cannot comply with the new regime.
Key filing deadlines
The Making Tax Digital filing deadlines from 6 April 2026 and the key dates are as follows:
There is also final end‑of‑period statement then ties everything together. These dates are fixed and missing the deadlines could prove costly - see below.
Penalties for non-compliance
Each update which is filed late earns one penalty point. Reach four points and HMRC will hit you with a £200 fine. Every missed deadline after that is another £200. Fail to submit your final declaration on time and more penalties and interest follow.
This points based system for penalties is similar to that introduced for VAT and we will cover this in a future article. Do not underestimate the financial impact. Acting now protects your business and will give you peace of mind.
Summary
Making Tax Digital is coming and the sooner you act, the smoother the process becomes. What's more you can join in the current tax year to practise reporting early without risk. Explore software options now and set up systems before the deadline rush begins.
For more useful information, check out our Ebooks here.
And if you'd like to know how we can help you with all of this, or with anything else, feel free to give us a call on 01202 048696 or email us at [email protected].
Alternatively, please feel free to complete our Business Questionnaire here.