Making Tax Digital

 Barnstone is one of the leading Financial and Legal companies, as listed within the TimesOnLine

 HMRC - 12 November 2020:

“VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are now required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns.”

“VAT-registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax digital rules for their first return starting on or after April 2022.”

“Self-employed businesses and landlords with annual business or property income above £10,000 will need to follow the rules for Making Tax Digital for Income Tax from their next accounting period starting on or after 6 April 2023.”

As you can see, HMRC are actively changing the way in how Businesses and Individuals need to report and file their Tax returns. This means that all applicable Businesses and Individuals will need to keep all of their records digitally and utilise suitable Software to transmit their VAT returns to HMRC without any manual intervention.

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For those Company’s and Individuals who think that they already have this covered (be aware that some systems claim to be compliant but unfortunately come up short…) we can help you to ensure that you meet all of the HMRC requirements of a complete end-to-end digital reporting system, but for those who don’t then you really should be thinking about this change now…

We can help making tax digital

Barnstone can happily guide you through the requirements of ensuring you are Making Tax Digital compliant.

We can also register you with HMRC for Making Tax Digital, supply and set you up with the relevant Accounting Software, perform any necessary training to allow you to implement the changes and provide on-going support to ensure you make the transition to MTD with the minimum of disruption.

Please note: If you already utilise a form of software, say for stock control or such like, we can also advise whether this will meet the HMRC Making Tax Digital requirements. If it doesn’t, then you may find that you need to work with your specific Software provider to ensure you can meet the HMRC requirements.

Barnstone Accountancy are here to help with unbiased and informed advice to ensure you and your Business are ready to meet the MTD deadlines.

No fuss, jargon free and easy to understand.

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Frequently Asked Questions

  • Making Tax Digital (MTD) is an HMRC initiative that requires eligible businesses, sole traders and landlords to keep digital tax records and use compatible accounting software to report information to HMRC. For Income Tax, eligible taxpayers must maintain digital records, send quarterly updates and submit their tax return using MTD-compatible software.

  • Making Tax Digital for Income Tax applies to sole traders and landlords registered for Self Assessment whose qualifying income from self-employment and property exceeds the relevant HMRC threshold. From 6 April 2026, the threshold is over £50,000; it reduces to over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028.

  • Making Tax Digital for Income Tax Self Assessment (MTD ITSA) applies to self-employed individuals and landlords with qualifying gross annual income:

    April 2026: Mandatory for self-employed individuals and landlords with income over £50,000.

    April 2027: Extended to cover self-employed individuals and landlords with income over £30,000.
    Those falling under these income limits must track income and expenses digitally and submit quarterly updates to HMRC

  • You need to create and store digital records of your business income and expenses using MTD-compatible software. You must also retain supporting records, such as invoices and bank statements, that you use to prepare your tax return.

  • Under Making Tax Digital for Income Tax, eligible sole traders and landlords need to send quarterly updates to HMRC using compatible software. These updates contain summaries of income and expenses for the relevant period. An annual tax return is also required, including any necessary adjustments, reliefs and other income.

  • Barnstone Accountancy provides end-to-end MTD support, including HMRC registration, software selection and setup, data migration, user training, and ongoing management. We ensure your business achieves full, hassle-free digital compliance.