Latest news with #MTD-compatible
Yahoo
06-05-2025
- Business
- Yahoo
MTD posts challenges and opportunities for UK accountants
Making Tax Digital (MTD) for income tax is poised to reshape the UK accountancy sector in 2025, emerging as both the industry's most significant challenge and its greatest opportunity, according to a recent Accountex survey. The survey, which gauged accountants' perspectives on the digitalisation of tax and Self-Assessment, revealed that 81.70% of respondents view MTD as their primary concern for 2025. Other notable challenges include tax changes (44.44%), AI adoption (38.56%), client servicing (33.33%), and recruitment (20.26%). Despite these concerns, 79.08% of accountants also see MTD as a major opportunity. The top five opportunities identified were MTD (79.08%), AI (46.41%), tax changes (46.41%), client servicing (41.83%), and new business acquisition (21.57%). Accountants noted that MTD's requirement for more frequent communication will provide greater visibility into clients' businesses, enabling upselling, stronger relationships, and expanded advisory services. However, preparedness remains a concern, with 34% of accountants stating they are not ready for MTD for income tax, set to take effect in April 2026 for sole traders and landlords with qualifying income from self-employment and property exceeding £50,000. While previous MTD mandates in 2019 and 2022 saw more than 90% of businesses adequately prepare, 11.15% of agents still rely on the HMRC platform for filing returns, an option that will not be available for self-assessment returns above the £50,000 threshold in 2026. HMRC figures highlight the benefits already being realised, with 45% of businesses reporting time savings of up to 40 hours per year, 40% noting improved operations and finances, and 20% crediting MTD with driving digital transformation. The total estimated value of time saved ranges between £603m and £915m annually. Key changes under MTD for Income Tax include mandatory digital record-keeping, the use of MTD-compatible software, and quarterly submissions of income and expense summaries to HMRC. Accountants estimate that the initial £50,000 threshold will affect 20% of their clients, with the impact expected to grow significantly in April 2027 for those with qualifying income above £30,000 and in April 2028 for those above £20,000. Accountants also view AI as a tool to streamline processes, improve client servicing, and attract new business. The survey suggests that the shift to MTD is not solely about software or compliance but requires a cultural change in how tax and Self-Assessment are approached. Early preparation, client education, and internal team alignment are seen as critical for accountancy firms to navigate and capitalise on this digital transition.
Glasgow Times
28-04-2025
- Business
- Glasgow Times
HMRC rule changes: Making Tax Digital Self Assessment 2026
This is what it describes as its 'most significant change to Self Assessment since 1997'. Sole traders and landlords are being urged to act now, with one year until Making Tax Digital for Income Tax launches, with eligible taxpayers encouraged to sign up to a testing programme now to get ahead of the changes. A statement from HMRC says: "The launch on April 6 2026 marks a significant and ultimately time-saving change in how these individuals will need to keep digital records and report their income to HM Revenue and Customs (HMRC). "By keeping digital records throughout the year, sole traders and landlords can save hours previously spent gathering information at tax return time – allowing them to spend more time focusing on their business activities and in turn, driving economic growth as part of our Plan for Change." Quarterly updates are designed to spread the workload more evenly throughout the year and bring the tax system closer to real-time reporting, avoiding a rush of receipt-filing and paperwork ahead of a January 31 deadline. James Murray MP, Exchequer Secretary to the Treasury, says: "MTD for Income Tax is an essential part of our plan to transform the UK's tax system into one that supports economic growth. 'By modernising how people manage their tax, we're helping businesses work more efficiently and productively while ensuring everyone pays their fair share. 'This is a crucial step in this government's decade of national renewal and our Plan for Change, as we clear away barriers that hold back growth.' From April 2026, self-employed people with qualifying income above £50,000 will need to keep digital records, use MTD-compatible software and submit quarterly summaries of their income and expenses to HMRC. These digital requirements will help businesses save time through more efficient record-keeping, reduce errors in tax calculations, and provide a clearer picture of their tax obligations throughout the year. Qualifying income includes gross income from self-employment and property before any tax allowances or expenses are deducted. Those with qualifying income above £30,000 will also be required to use MTD for Income Tax from April 2027. The threshold will then decrease to £20,000 from April 2028. The phased introduction of MTD for Income Tax follows the successful implementation of MTD for VAT, which is now used by more than 2 million businesses. An independent report published in 2021 found that 69% of mandated businesses experienced at least one benefit from MTD for VAT, while 67% reported that it reduced the potential for mistakes in their record keeping. Recommended reading: Craig Ogilvie, HMRC's Director of Making Tax Digital, says: "MTD for Income Tax is the most significant change to the Self Assessment regime since its introduction in 1997. "It will make it easier for self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax. "By signing up to our testing programme now, self-employed people and landlords will be able to familiarise themselves with the new process and access dedicated support from our MTD Customer Support Team, before it becomes compulsory next year.'
Leader Live
28-04-2025
- Business
- Leader Live
HMRC rule changes: Making Tax Digital Self Assessment 2026
This is what it describes as its 'most significant change to Self Assessment since 1997'. Sole traders and landlords are being urged to act now, with one year until Making Tax Digital for Income Tax launches, with eligible taxpayers encouraged to sign up to a testing programme now to get ahead of the changes. A statement from HMRC says: "The launch on April 6 2026 marks a significant and ultimately time-saving change in how these individuals will need to keep digital records and report their income to HM Revenue and Customs (HMRC). "By keeping digital records throughout the year, sole traders and landlords can save hours previously spent gathering information at tax return time – allowing them to spend more time focusing on their business activities and in turn, driving economic growth as part of our Plan for Change." Quarterly updates are designed to spread the workload more evenly throughout the year and bring the tax system closer to real-time reporting, avoiding a rush of receipt-filing and paperwork ahead of a January 31 deadline. James Murray MP, Exchequer Secretary to the Treasury, says: "MTD for Income Tax is an essential part of our plan to transform the UK's tax system into one that supports economic growth. 'By modernising how people manage their tax, we're helping businesses work more efficiently and productively while ensuring everyone pays their fair share. 'This is a crucial step in this government's decade of national renewal and our Plan for Change, as we clear away barriers that hold back growth.' From April 2026, self-employed people with qualifying income above £50,000 will need to keep digital records, use MTD-compatible software and submit quarterly summaries of their income and expenses to HMRC. These digital requirements will help businesses save time through more efficient record-keeping, reduce errors in tax calculations, and provide a clearer picture of their tax obligations throughout the year. Qualifying income includes gross income from self-employment and property before any tax allowances or expenses are deducted. Those with qualifying income above £30,000 will also be required to use MTD for Income Tax from April 2027. The threshold will then decrease to £20,000 from April 2028. The phased introduction of MTD for Income Tax follows the successful implementation of MTD for VAT, which is now used by more than 2 million businesses. An independent report published in 2021 found that 69% of mandated businesses experienced at least one benefit from MTD for VAT, while 67% reported that it reduced the potential for mistakes in their record keeping. Craig Ogilvie, HMRC's Director of Making Tax Digital, says: "MTD for Income Tax is the most significant change to the Self Assessment regime since its introduction in 1997. "It will make it easier for self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax. "By signing up to our testing programme now, self-employed people and landlords will be able to familiarise themselves with the new process and access dedicated support from our MTD Customer Support Team, before it becomes compulsory next year.'
North Wales Chronicle
25-04-2025
- Business
- North Wales Chronicle
HMRC rule changes: Making Tax Digital Self Assessment 2026
This is what it describes as its 'most significant change to Self Assessment since 1997'. Sole traders and landlords are being urged to act now, with one year until Making Tax Digital for Income Tax launches, with eligible taxpayers encouraged to sign up to a testing programme now to get ahead of the changes. A statement from HMRC says: "The launch on April 6 2026 marks a significant and ultimately time-saving change in how these individuals will need to keep digital records and report their income to HM Revenue and Customs (HMRC). "By keeping digital records throughout the year, sole traders and landlords can save hours previously spent gathering information at tax return time – allowing them to spend more time focusing on their business activities and in turn, driving economic growth as part of our Plan for Change." Quarterly updates are designed to spread the workload more evenly throughout the year and bring the tax system closer to real-time reporting, avoiding a rush of receipt-filing and paperwork ahead of a January 31 deadline. James Murray MP, Exchequer Secretary to the Treasury, says: "MTD for Income Tax is an essential part of our plan to transform the UK's tax system into one that supports economic growth. 'By modernising how people manage their tax, we're helping businesses work more efficiently and productively while ensuring everyone pays their fair share. 'This is a crucial step in this government's decade of national renewal and our Plan for Change, as we clear away barriers that hold back growth.' From April 2026, self-employed people with qualifying income above £50,000 will need to keep digital records, use MTD-compatible software and submit quarterly summaries of their income and expenses to HMRC. These digital requirements will help businesses save time through more efficient record-keeping, reduce errors in tax calculations, and provide a clearer picture of their tax obligations throughout the year. Qualifying income includes gross income from self-employment and property before any tax allowances or expenses are deducted. Those with qualifying income above £30,000 will also be required to use MTD for Income Tax from April 2027. The threshold will then decrease to £20,000 from April 2028. The phased introduction of MTD for Income Tax follows the successful implementation of MTD for VAT, which is now used by more than 2 million businesses. An independent report published in 2021 found that 69% of mandated businesses experienced at least one benefit from MTD for VAT, while 67% reported that it reduced the potential for mistakes in their record keeping. Craig Ogilvie, HMRC's Director of Making Tax Digital, says: "MTD for Income Tax is the most significant change to the Self Assessment regime since its introduction in 1997. "It will make it easier for self-employed people and landlords to stay on top of their tax affairs and help ensure they pay the right amount of tax. "By signing up to our testing programme now, self-employed people and landlords will be able to familiarise themselves with the new process and access dedicated support from our MTD Customer Support Team, before it becomes compulsory next year.'
