Latest news with #MakingTaxDigital
Daily Mirror
22-05-2025
- Business
- Daily Mirror
HMRC confirms exact date huge change to income tax will start and what it means
From April next year, taxpayers earning over £50,000 from self-employment or property income will need to comply with new Making Tax Digital (MTD) for Income Tax rules A major tax change will be introduced next year, affecting thousands of Brits. HMRC has confirmed that the next phase of the rollout for Making Tax Digital (MTD) will go ahead on April 6, 2026. From this date, taxpayers earning over £50,000 from self-employment or property income will need to comply with new MTD for Income Tax rules. This is a new system for recording and reporting income and expenses, and all businesses' records will need to be kept digitally, and you will need to file quarterly updates on your earnings to the tax office. The move is expected to affect approximately 780,000 people in its first wave. The next wave will be introduced from April 2027 for those earning between £30,000 and £50,000, with another 970,000 people affected. A further expansion to those earning £20,000 will be introduced from April 2028 under the current plans. According to HMRC, the change is designed to improve accuracy, reduce errors, and save time. They believe the digital transition will help taxpayers stay on top of their obligations while offering a clearer picture of their tax position year-round. HMRC is currently encouraging early adopters to join the Making Tax Digital testing programme, which the tax office says will give people extra time to familiarise themselves with the new system and access dedicated support. Making Tax Digital has already been rolled out for VAT and has reportedly helped over two million businesses reduce errors and increase efficiency. A 2021 report found that 69% of businesses saw at least one benefit, with 67% reporting fewer record-keeping mistakes. Last month, James Murray MP, Exchequer Secretary to the Treasury, said: "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.' Join Money Saving Club's specialist topics For all you savvy savers and bargain hunters out there, there's a golden opportunity to stretch your pounds further. The Money Saving Club newsletter, a favourite among thousands who thrive on catching the best deals, is stepping up its game. Simply follow the link and select one or more of the following topics to get all the latest deals and advice on: Travel; Property; Pets, family and home; Personal finance; Shopping and discounts; Utilities. Craig Ogilvie, HMRC's Director of Making Tax Digital, said: "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.'
Yahoo
16-05-2025
- Business
- Yahoo
HMRC set to introduce 'biggest' tax challenge for people who earn over £50,000
HMRC's Making Tax Digitalhas been named the 'biggest challenge' of the next 12 months with thousands at risk of future fines. Making Tax Digital for income tax is expected to be implemented for all self-employed people earning over £50,000 by next April. Just 3% of self-employed people are currently using the required third-party software to submit their tax returns, demonstrating how significant the shift will be over the next year. A new survey by accounting conference and expo Accountex London has found that 4 in 5 accounting professionals think MTD for income tax is the 'biggest challenge' of the next 12 months. READ MORE: UK tourists in Tenerife and Gran Canaria warned as protesters say 'we will not stop' READ MORE: DWP announces exact month bank account checks will begin for three benefits READ MORE UK tourists warned as people 'abandon' Majorca and 'can't take it anymore' Craig Ogilvie, Director of Making Tax Digital at HMRC said: 'With April 2026 on the horizon, we are issuing letters to customers we believe will be mandated, outlining specific requirements and timelines. We urge those who meet the mandation criteria to join our testing programme on now to help shape the final service and make your transition smoother.' Clive Barnett, External Readiness Lead, HMRC: 'Joining our MTD for Income Tax testing phase now gives businesses and agents hands-on experience before April 2026. Participants can prepare for this significant change with benefits such as dedicated support and penalty-free quarterly submissions. 'HMRC is making sure our marketing, communications and product launches all align to ensure there's a package of support around during the testing period and the long-term adoption to help people make the right choices for their business and clients.' Eriona Bajrakutaj, founder of Volt Digital Transformation, explains that MTD implementation will require further communication with clients, potentially requiring firms to hire more accountants. Eriona said: 'If you do not implement digital systems, you will need the extra capacity because we're now going to see clients five times a year. I think managing client expectations will be a big challenge because it means clients will need to reframe their business model to ensure it can report in a digital format. But clients can actually be trained quite easily. The biggest push back to be aware of is from your team. If they don't want to go on the digital journey, it will hinder how fast you get there and how well you can service your clients. Try to involve your teams during every step of the process so they can see what you're trying to achieve and know their opinion matters as you transition.'
Yahoo
13-05-2025
- Business
- Yahoo
Sponsored: Accountex London returns for its 14th year
The world's largest accounting and finance expo, Accountex London is returning to Excel on the 14-15 May 2025. Over 11,500 attendees from around the world are expected to reunite, after the 2024 show was hailed the biggest show in Accountex history. 'Every year Accountex proves itself as THE one-stop-shop for the accounting and finance community. And this edition is no exception! There are lots of new features to help attendees leave with ideas that they can immediately put into practice, and boost their careers. As always, the education programme is packed with exclusive industry updates, and the exhibitor list is full of both established brands and up-and-coming start-ups. By this point, visitors know to expect a few surprises, and we can't wait to see the reactions!' Said Accountex Portfolio Director, Caroline Hobden. Attendees will have the chance to reconnect with existing suppliers, learn about the latest product launches, and explore new solutions, to streamline their business processes, reduce time and costs. The exhibitor list boasts 300 fintech companies including leaders like FreeAgent, Intuit QuickBooks, IRIS, Sage, TaxCalc, Wolters Kluwer, and Xero. As well as emerging brands and first-time exhibitors such as AY Business Law, Briefcase, Business Fitness, Accounting Flow, AuditBot and Adsum. As well as live software demonstrations and face-to-face discussions with the teams behind the brands, visitors will get their questions answered to understand how these solutions can benefit their businesses. The CPD-accredited seminar programme is compiled of 250+ seminars across 13 theatres. Programme themes incorporate everything that affects accounting, finance and bookkeeping professionals in and out of the office. Topics include everything from practice growth strategies and developments in AI to ESG, AML and Making Tax Digital updates from HMRC. As thousands of the accounting and finance community reunite over the two days, there are countless networking opportunities to make new connections and catch up with old colleagues. This includes the Bookkeepers Basecamp, Sustainability zone, Content Creation Clinic and after-show parties. Accountex London is taking place at Excel on the 14-15 May 2025. You can register for your free ticket here. Accountex "Sponsored: Accountex London returns for its 14th year" was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Guardian
05-05-2025
- Business
- The Guardian
HMRC under fire for taking more than four months to process tax refunds
HM Revenue and Customs has come under fire for taking more than four months to process tax refunds owed to some individuals and businesses that accountants say used to take a maximum of a few weeks. The reported delays coincide with anger over a separate HMRC announcement that it is shutting a free-to-use online filing service used by some small businesses. In recent months, HMRC has been criticised by MPs over issues ranging from long call-waiting times – they have increased to more than 23 minutes on average – to the growing complexity of the tax system. Last week, parliament's spending watchdog, the public accounts committee (PAC), said that 'taxpayers' trust in HMRC is falling', and that attempts to transform its services via the Making Tax Digital programme had imposed hundreds of millions in extra costs on the taxpayer. Nikki Ainscough, the managing director of York-based Equilibrium Accountants, which specialises in supporting small businesses and charities, said that in cases she was dealing with, HMRC was expected to take more than four months to process refunds of overpaid tax or national insurance. The delay seems to relate in particular to employers' pay as you earn (PAYE), and also the Construction Industry Scheme (CIS), which requires contractors within the building sector to make tax deductions on behalf of subcontractors. Ainscough said one of her clients was owed 'quite a bit of money' after making an overpayment on its PAYE bill. 'We are being told they are going to need to wait until August for the funds to be released, for a request we put in [in March],' she said. She shared a screenshot of HMRC's response, which said that 'you can expect a reply by 22 August 2025', and that it was 'currently processing requests received on 10 December 2024'. Ainscough said she had run her own accountancy firm for 12 years, and that traditionally it typically took a maximum of four to six weeks for refunds to come through. 'I've never experienced this … Why has it jumped so significantly?' she said. 'If the backlog is that big, it suggests a high volume of claims and a potentially substantial sum of money that is owing to small businesses and individuals at a time when cashflows are critical.' HMRC has a website tool that lets people find out when they can expect to receive a reply. Ainscough used it to get an estimate of when another of her clients – who is due a self-assessment refund of more than £1,000 – could expect to receive it, based on a request submitted on 24 April. The response stated 15 June 2025 and that HMRC was processing claims received on 17 March, which indicates a smaller backlog for self-assessment refunds – butwarned that 'we may need a further 12 weeks after 15 June 2025 to issue your repayment'. It is understood that some of the HMRC staff working on PAYE and CIS refunds have been taking part in industrial action. An HMRC spokesperson said: 'We're tackling response times for these refund claims by allocating extra staff to work on them.' The spokesperson added: 'We've made significant improvements to our customer service overall. Customer satisfaction stands at about 80%, and the funding settlement we have received means we'll be able to meet our service standards in 2025-26.' According to HMRC, most refund requests do not require further checks that can take up to 12 weeks. Another concern to businesses is a recent announcement from HMRC that a free online service for filing company tax returns and accounts will shut for good at the end of March 2026. This service is used by many small traders to file their annual accounts and calculate their corporation tax, but HMRC said it 'does not meet modern digital standards or recent changes to UK company law', and that from next April they will have to use third-party software. One reader told the Guardian: 'This means people will have to subscribe to a commercial, paid product for the privilege of paying corporation tax to the government.' One leading provider of accounting software for smaller businesses has plans starting at £15 a month, while some other companies charge more. A one-off purchase of a software package can cost well over £100. 'The online service was simple and fairly straightforward … It seems an incredibly retrograde step to withdraw it,' the reader said. Ainscough said HMRC had clearly decided it did not want to invest in keeping that software up and running. 'Most people have already been forced on to third-party software,' she said, adding that some of the software companies 'are taking full advantage of this' and 'cashing in' on people being required to use their software, while others were still offering good value for money. An HMRC spokesperson said: 'This transitional service was introduced in 2015 to help small, unrepresented companies switch to online filing when there was a limited software market. It's right that we close this outdated support now that there's a range of commercial software which provides a much better service, and we've published guidance to help companies prepare for the change.'
Daily Mail
30-04-2025
- Business
- Daily Mail
HMRC rule change set to catch-out landlords: Thousands will soon need to report income and expenses every three months
Landlords are being urged to prepare for a major tax shake-up that is set to overhaul how they report their income and expenses to HMRC. From 6 April 2026, those earning over £50,000 from self-employment or property income will need to start making quarterly submissions to the taxman. This is part of HMRC's shift towards digital record-keeping - what it is calling Making Tax Digital (MTD) for Income Tax. The move is expected to affect approximately 780,000 people in its first wave, with another 970,000 to follow from April 2027, with further expansion in 2028. The first group affected includes sole traders and landlords with gross income over £50,000. Those earning between £30,000 and £50,000 will follow in April 2027, with further expansion to those earning £20,000 or more from 2028. The income threshold is based on gross income, not profits — which means even those making modest earnings after expenses could still be caught by the new rules. 'Many people assume these thresholds apply to their net income after tax relief, but that's not the case,' Wood warned. 'It's based on total income before deductions, so the scope is broader than some might expect.' 'This is the biggest change to personal tax reporting since Self Assessment was introduced,' said Andy Wood, international tax expert at Tax Natives. 'While MTD aims to streamline the process, it also places a much greater administrative burden on individuals who may not be set up for quarterly reporting.' Dawn Register, a tax partner at BDO warns the move will create more admin for landlords who at present only need to fill in a tax return once a year if they let out of property they hold in their personal name. 'Starting next April, there will be an extra reporting duty for landlords, who will be required to report their income and expenses on a quarterly basis with their usual annual tax return used to make any final adjustments after the end of the tax year,' said Register. 'This will create new paperwork challenges for landlords, but HMRC argue that this will spread the administrative burden throughout the course of the year. 'If you are one of the landlords included in the first wave of Making Tax Digital for Income Tax starting in April 2026, you may wish to start thinking about the software that you will need to be able to start reporting on a quarterly basis.' What is 'Making Tax Digital' for Income Tax? The system will require some landlords to keep digital records of their income and expenses, use compatible software to manage their tax affairs and submit updates to HMRC every quarter. 'It's not just about moving tax online – it's about shifting to real-time reporting,' said Andy Wood. 'That means landlords and sole traders will need to adjust how they manage their finances throughout the year, not just at tax return time.' Why is it happening? The change is designed to improve accuracy, reduce errors, and save time, according to HMRC. They believe the digital transition will help taxpayers stay on top of their obligations while offering a clearer picture of their tax position year-round. But some experts caution that not all taxpayers will find the transition easy. 'There are benefits to this system – especially for those already using cloud accounting software,' added Wood. 'But for many smaller landlords or sole traders, this could mean new costs, new software, and a steep learning curve. Planning ahead is crucial.' Should you sign up early? HMRC is currently encouraging early adopters to join the MTD testing programme, giving them time to familiarise themselves with the new system and access dedicated support. 'Signing up early is wise,' said Wood. 'It allows you to test-drive the system, work out any teething issues, and avoid a last-minute scramble in 2026. 'Taxpayers who prepare in advance will be in a far better position when the deadline hits.' Best mortgage rates and how to find them Mortgage rates have risen substantially over recent years, meaning that those remortgaging or buying a home face higher costs. That makes it even more important to search out the best possible rate for you and get good mortgage advice. Quick mortgage finder links with This is Money's partner L&C > Mortgage rates calculator > Find the right mortgage for you To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C. This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit. You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes. If you're ready to find your next mortgage, why not use This is Money and L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you.
