Making Tax Digital For Self Employed

by | Feb 10, 2025 | Uncategorized

Making Tax Digital - What does it mean for the self employed

Making Tax Digital for Self Employed

Essential Guide for 2025 and Beyond

Making Tax Digital for Self Employed: What's Changing?

Self-employed professionals are facing a significant change in how they manage their taxes. Making Tax Digital (MTD) for self-employed individuals introduces new digital requirements that will transform tax reporting. Here's your comprehensive guide to navigating these changes - written in plain English so that it all makes sense!

Key Changes for Self-Employed Professionals Under MTD

 

When Does Making Tax Digital for Self-Employed People Start?

  • If you earn £50,000+ Income: Making Tax Digital begins April 2026
  • If you earn between £30,000-£50,000 Income: Implementation from April 2027
  • It's important to remember MTD is for Self-employed individuals and landlords

MTD Requirements for Self-Employed Tax Reporting

Under Making Tax Digital, self-employed individuals must:

  • Keep digital business records
  • Submit quarterly updates through MTD-compatible software
  • Provide end-of-year statements
  • File final tax declarations digitally
April 2026 image onphone - when making tax digital becomes live

Making Tax Digital Software for Self Employed

Approved Software Options

Self-employed professionals can choose from a few options for software, popular options are:

  • QuickBooks
  • Xero
  • FreeAgent

Digital Record-Keeping Requirements

Self-employed individuals must track things digitally now. No more spreadsheets and paper records. Switiching to one of the approved Making tax digital software options we mentioned above will help you to track your:

  • Business income digitally
  • Expenses through MTD software
  • Bank transactions electronically
  • All business-related financial activities

Self-Employed MTD Reporting Schedule

 

New Quarterly Updates

If you are Self-employed, or a landlord you now need to:

  1. Submit four quarterly updates over the year instead of just one.
  2. Complete an End of Period Statement anotherwise known as EOPS
  3. File a Final Declaration which is your enof of year submission that finalises your accounts.
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Preparing Your Self-Employed Business for MTD

 

Essential Steps for Self-Employed Compliance

  1. Assess Your Income: Check how much you have earned over the year from your self-employed business or property. That will help you to determine your MTD start date
  2. Choose MTD Software: Select appropriate digital tools - we love to use Xero
  3. Digitize Records: Move from paper to digital systems - we can help set you up with an approved MTD software so that your accounting runs smoother.
  4. Plan Quarterly: Prepare for regular submissions and learn the new process with how to do that. If that feels a bit too much just get in touch with us, we can help take this strain from you.

Professional Support for Self-Employed MTD Transition

 

Our MTD Services for Self-Employed Individuals

  • Help you to choose and set up your software
  • Training on how to use the software if you opt to do your own accounts
  • Help to submit your quarterly reports
  • Year-end completion support
  • Ongoing MTD guidance - it's part of our job to keep up to date with the changes so we can make sure you're in the loop too.

Common Questions About MTD for Self-Employed

 

"Will Self Assessment Change Under MTD?"

Yes! Making Tax Digital replaces traditional Self Assessment with digital quarterly reporting for self-employed individuals. So no more annual reports.

 

"How Will MTD Affect My Self-Employed Business?"

  • Regular digital record-keeping becomes mandatory - no spreadsheets and piles of receipts hiding in your desk
  • Quarterly updates to HMRC replace one annual returns
  • More frequent engagement with tax obligations
  • Better financial visibility throughout the year - you'll have a better view of what is happening in your business and less chance of a surprise at the end.

Getting Started with MTD as a Self-Employed Professional

  1. Book a Consultation: Discuss your specific self-employed tax needs
  2. Create Your MTD Timeline: Build a personalized transition plan
  3. Implement Digital Systems: Set up your MTD-compatible software
  4. Maintain Compliance: Stay on track with new requirements

Expert Support for Self-Employed MTD Transition

Making Tax Digital for self-employed individuals is a significant change, but with the proper support, it's manageable. We can help you transition smoothly to the new digital tax system.

Contact us today to prepare your self-employed business for Making Tax Digital.