Tag Archive for: Income Tax

Two-Thirds of MTD Clients Haven’t Registered Yet. Why You Need to Act Now

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Recent research from Azets found that around two-thirds of clients affected by MTD had still not registered.

That is a worrying figure, especially now we are in July, and the first submission deadline is only weeks away. If you are within scope and have not registered yet, now is the time to act.

If you fall within this scope and have not yet registered, it is crucial to act now.

Understanding why this matters is essential.

Registering for MTD is not the same as simply using bookkeeping software.

You need to make sure:

  • You are signed up correctly
  • Your software is HMRC-compatible
  • Your records are digital
  • Your income and expenses are being kept up to date
  • You are ready for quarterly submissions

Leaving it too late could mean rushing software setup, moving records across, and trying to fix bookkeeping gaps close to the deadline.

Who needs to register?

MTD for Income Tax now applies to:

  • Sole traders with gross income over £50,000
  • Landlords with gross property income over £50,000
  • Those with combined self-employment and property income over £50,000

The first quarterly period is already underway and runs from 6 April to 5 July 2026.

The first submission deadline is 7 August 2026.

The threshold will be reduced to £30,000 from April 2027 and to £20,000 from April 2028, bringing many more people into scope.

Why people are delaying

Some people do not realise they are affected. Others assume their accountant or software has already handled it. Some are simply putting it off because MTD feels complicated.

But delaying registration does not delay the rules.

If you are affected, you still need to comply.

What happens next?

The first year includes a soft landing, so no penalty points will be issued for late quarterly updates during 2026/27. But that does not mean you can ignore the deadlines.

You still need to submit updates. More importantly, you need to use the first year to build good habits before penalties become a real risk.

How Rosemary Bookkeeping can help you register and get MTD ready

If you are part of the two-thirds who have not yet registered for Making Tax Digital, you do not have to work it out alone.

Your local Rosemary Bookkeeper can help you understand what needs to happen next and take the pressure out of getting ready before the first submission deadline.

We can help with:

  • Checking whether MTD applies to you
  • Registering for Making Tax Digital
  • Choosing and setting up HMRC-compatible software
  • Moving your records into a digital format
  • Reviewing income and expenses for the first quarterly update
  • Preparing for the 7 August 2026 submission deadline
  • Keeping your bookkeeping up to date going forward

This is not just about registration. It is about ensuring your records are accurate, your software works, and your submissions are handled properly.

With the first deadline only weeks away, now is the time to get support.

Find your nearest Rosemary Bookkeeper today.

Is Your Current Bookkeeping Making Tax Digital Ready?

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Is your current bookkeeping Making Tax Digital ready?

Making Tax Digital is becoming a standard part of business operations. Although not everyone is required to comply immediately, expectations regarding digital records and regular updates are already influencing bookkeeping practices.

If you’re uncertain about whether your current setup is ready, you’re not alone. Many business owners feel they might be falling behind, but often they only need to make a few small adjustments. This simple self-check is designed to help you assess your current situation without any pressure.

Do you keep your records digitally?

MTD mandates that records be maintained in a digital format, including income, expenses, and relevant supporting details.

Ask yourself:

  • Are your records stored digitally rather than only on paper?
  • Can you easily access past transactions when needed?

If you primarily depend on paper or handwritten notes, this is the first area to assess.

Are your records kept up to date during the year?

With MTD (Making Tax Digital), bookkeeping is no longer a task to be done just once a year. It’s important to maintain regular updates.

Consider:

  • Do you update your records weekly or monthly?
  • Are there long gaps where nothing is recorded?

If you usually catch up near deadlines, this may indicate your routine needs support.

Can you clearly separate business and personal spending?

Maintaining clear separation is crucial under MTD. Mixed transactions complicate record reviews and can lead to repeated errors.

Check whether:

  • You use a dedicated business bank account
  • Personal spending regularly appears in your business records

Maintaining clarity simplifies digital reporting significantly.

Are your records accurate, not just complete?

It’s essential to record all transactions, but ensuring their accuracy is equally important.

Ask yourself:

  • Are expenses consistently categorised?
  • Do the figures match the bank statements after reconciliation?

Repeated small errors can become increasingly difficult to correct over time under MTD.

Do you know when MTD will apply to you?

Many people are uncertain about their timelines; here is clarification.

Understanding when Making Tax Digital (MTD) applies allows you to plan ahead with confidence rather than feeling rushed.

Do you feel confident explaining your figures?

A simple test is whether you can explain your numbers when asked. If your records are unclear or confusing, that often indicates the system needs improvement.

Effective bookkeeping should provide clarity, not uncertainty.

What your answers mean

If you answered “yes” to most of these questions, your bookkeeping is likely on the right track. If a few areas raised concerns, it doesn’t mean you are failing; rather, it indicates where small changes could lead to significant improvements.

MTD readiness is not about being perfect; it’s about consistency, clarity, and developing good habits.

How Rosemary Bookkeeping can help

Preparing for Making Tax Digital can be stress-free. Rosemary Bookkeeping assists businesses at every stage, whether you’re almost ready to review your setup or just beginning.

Your local Rosemary Bookkeeper can help you:

  • Assess your current bookkeeping
  • Identify small changes that improve readiness
  • Keep digital records accurate and organised
  • Prepare calmly for future MTD requirements

If you want reassurance or practical support, we are here to help get your bookkeeping Making Tax Digital ready.

Find your nearest Rosemary Bookkeeper today.

Making Tax Digital Checklist for Sole Traders

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If you’re operating your own business as a sole trader, you’re likely familiar with Making Tax Digital (MTD).

While it may still seem somewhat abstract, it’s essential to recognise that it’s on the way, and it’s better to prepare now rather than waiting until the last minute.

Below is our ‘Making Tax Digital Checklist for Sole Traders’, along with some commentary and common oversights that people often miss along the way.

1. Check if you’re affected by Making Tax Digital

  • If your total income from self-employment or property exceeds £50,000 in a year (before expenses), you will need to comply starting from 6 April 2026.
  • If your income is above £30,000, you’ll need to comply from April 2027.
  • If your income exceeds £20,000, the requirement will take effect later, in April 2028.
  • If your income falls below those thresholds, you are not required to switch yet, but you can choose to sign up early.

Quick Tip: Determine your gross income now (before expenses) and identify your tax bracket. Don’t assume you’ll stay under the limit. If you’re close, act as if the rule applies to you now.

2. Choose and set up compatible software

One of the significant changes under MTD is that you must use software recognised by HM Revenue & Customs (HMRC) to maintain digital records and submit updates.

Speaking to your local Rosemary Bookkeeper is the best cause of action here. A free consultation will give you all the information you need to help you decide which software is the best fit for your business.

Quick tip: If you’re still using spreadsheets or paper records, consider making the switch now. You’ll have more time to familiarise yourself before the compliance deadline arrives.

3. Make sure your records are digital and organised

This is more than just bookkeeping online. If you’re in scope (or just out), you must keep your business records in a digital format rather than solely on paper.

Key items to cover:

  • All details regarding business income and expenses must be submitted in digital format.
  • If you currently use cloud accounting software, ensure it is compatible with Making Tax Digital (MTD).
  • If you use both paper and digital formats, you’ll need to transition to a fully digital system for the appropriate records.
  • Prepare your bookkeeping so that it is ready for quarterly submissions once the requirement starts.

Quick Tip: We understand that bookkeeping may not be your favourite task, but handling it early reduces stress later and allows you to identify issues, such as missing invoices or forgotten receipts, when you still have time to address them. Our local Rosemary Bookkeepers are on hand to help! 

4. Sign up (or prepare to sign up) with HMRC

If you meet the obligation threshold, you must sign up for MTD for Income Tax through your software or agent, instead of the old method, directly with HMRC.

Things to check before or during sign-up:

  • Your National Insurance number is available.
  • Your business start date (if applicable) is known.
  • You have the right software and it’s linked to HMRC.
  • If you are using an agent or bookkeeper, ensure they are prepared for MTD. Agents must also be ready.

Quick Tip: At Rosemary Bookkeeping, we are fully equipped to support with Making Tax Digital and are ready to assist you with your bookkeeping needs. We can also offer a hassle-free, end-to-end solution by managing your HRMC gateway too. Speak to your local Rosemary Bookkeeper for more information. 

5. Plan for quarterly updates and the end-of-year final declaration

One of the most significant changes is that instead of submitting one annual tax return for your business income, under MTD for Income Tax, you will instead send quarterly updates of your income and expenses, along with a final declaration after the year ends.

Important deadlines (example) for those in scope:

  • Submit your income and expense summary for the period from April 6 to July 5 by August 7.

  • The deadlines for the other quarters follow a similar pattern: November 7, February 7, and May 7.

  • The final declaration must be submitted by January 31 of the year following the end of the tax year.

Quick Tip: If you view change as a consistent flow instead of a sprint, you’ll be better prepared. This approach also provides a clearer understanding of your tax liability earlier, aiding in cash flow planning. By choosing a Rosemary Bookkeeper- we support you throughout the year so these quarterly updates happen like clock-work. 

6. Review if any exemptions might apply

There are a few limited cases where you might be exempt from this requirement, such as if you are digitally excluded.

Check whether:

  • It is generally considered “not reasonably practicable” for you to use digital records, which is a very rare situation.
  • You currently fall below the required thresholds, so you are not yet subject to the mandate.

Quick Tip: If you believe you have an exemption, you’ll need to apply. But don’t rely on this – it shouldn’t become a procrastination excuse. Our Rosemary Bookkeepers are on hand to offer more advice on what is deemed as an exemption and what isn’t. 

7. Review your bookkeeping processes now and clean up historic records

Although the first mandate is 5 months or more away (depending on your income), it’s wise to get things in shape now.

Questions to ask yourself:

  • Are your invoices issued and stored digitally?
  • Do you scan and store expense receipts digitally?
  • Is your bookkeeping up to date (not months behind)?
  • Do you’ve a software system that you can use confidently?

Quick Tip: If you answer “no” to several of these, then treat them as tasks to clear. You’ll sleep better knowing you’re prepared.

Stop for a moment and reflect: many sole traders will think “it’s not relevant to me yet” – and in a sense, that’s true if your income is below the threshold. But waiting until the last minute is risky. A small oversight in your software choice, in record-keeping, or in understanding the quarterly deadlines could cost you.

Consider this a preparation project, not a panic. If you need assistance, Rosemary Bookkeeping is here to help: we can review your software and processes to ensure you’re ready for Making Tax Digital without any stress.

Find your nearest Rosemary Bookkeeper today.