Author: Glenn

MTD for Income Tax starts 6 April 2026 for the self-employed and landlords with £50k+ income. Plan early to stay compliant and avoid disruption.

MTD represents one of the most significant overhauls to the self-assessment regime since its introduction in 1997. This includes new requirements to keep digital records, using MTD-compatible software, and submitting quarterly updates of income and expenses to HMRC.

From April 2026, self-employed individuals and landlords with annual qualifying business or property income over £50,000 will be required to comply with the MTD for Income Tax rules. Qualifying income includes gross income from self-employment and property before any tax allowances or expenses are deducted.

This first rollout of MTD for Income Tax will affect approximately 780,000 taxpayers, with the next stage following in April 2027, extending the rules to those earning between £30,000 and £50,000. A further expansion, announced during the Spring Statement 2025, will apply MTD obligations to those with income over £20,000 from April 2028. The government is still considering the best approach for individuals earning below this lower threshold.

HMRC is asking some eligible taxpayers to sign up to its MTD testing programme on GOV.UK. This provides an opportunity to get comfortable with the new process before it becomes mandatory. Importantly, penalties for late submissions will not apply during the testing phase.

This move follows the rollout of MTD for VAT, which according to an independent report prepared for HMRC has helped over two million businesses improve accuracy and reduce errors.

As the deadline approaches, it is important to start planning in order to ensure a smooth transition to the new way of reporting Income Tax.

Is your child starting school this September? Tax-Free Childcare could save you up to £2,000 a year. Check your eligibility now and start planning ahead.

Working families whose children are starting school for the first time September 2025 could save up to £2,000 a year per child on their childcare bills, thanks to the government’s Tax-Free Childcare (TFC) scheme.

Designed to ease the financial burden of childcare, the TFC scheme offers eligible working families valuable support through a wide network of registered childcare providers. This includes childminders, breakfast and after-school clubs, and approved UK play schemes. Families can also build up their TFC account throughout the year, allowing them to save for higher childcare costs during school holidays.

The scheme is available for children up to the age of 11, with eligibility ending on 1 September following the child's 11th birthday. For children with certain disabilities, the scheme extends eligibility until 1 September after their 16th birthday.

Under the TFC scheme, for every £8 a parent contributes, the government adds £2, effectively topping up childcare savings by 25%. This support is capped at a maximum of £10,000 in contributions per child each year, meaning parents could receive up to £2,000 annually per child, or £4,000 for children with disabilities.

TFC is open to a wide range of working families, including the self-employed and those earning the National Minimum or Living Wage. Parents on paid sick leave, maternity, paternity, or adoption leave (both paid and unpaid) are also eligible. To qualify, each parent must work at least 16 hours per week and meet minimum income thresholds. However, households where either parent earns more than £100,000 a year, or those receiving Universal Credit or employer-provided childcare vouchers, are not eligible for the scheme.

Commenting on the scheme, HMRC’s Director General for Customer Services said:

“Starting school can be an expensive time – there’s a lot to buy and organise. Now that you know where your child will be going to school, it’s a good time to start planning your childcare arrangements. Tax-Free Childcare can help make those costs more manageable. Sign up today on GOV.UK and start saving.”

With school starting in just a few months, now is the perfect time for parents to check their eligibility and take advantage of the savings available through the scheme.

On 8 May 2025, the UK government announced a landmark trade agreement with the United States, aimed at reducing tariffs and bolstering key British industries. This deal is projected to save thousands of jobs, particularly in the automotive and steel sectors, and marks a significant step in strengthening UK-US trade relations.

Key Achievements of the UK-US Trade Deal:

1. Reduction of Car Export Tariffs:
   The US has agreed to lower tariffs on British car exports from 27.5% to 10% for up to 100,000 vehicles annually. This move is expected to save hundreds of millions of pounds for UK car manufacturers, notably benefiting companies like Jaguar Land Rover.
2. Elimination of Steel and Aluminium Tariffs:
   Tariffs on UK steel and aluminium exports to the US, previously set at 25%, have been removed. This change reopens the US market to British steelmakers, providing a critical boost to an industry that supports approximately 80,000 jobs across the UK.
3. Enhanced Market Access for UK Farmers:
   The agreement includes a reciprocal arrangement allowing UK farmers to export up to 13,000 metric tonnes of beef to the US. Importantly, this deal maintains existing UK food safety standards, ensuring that consumer protections remain intact.
4. Removal of Tariffs on US Ethanol:
   The UK will eliminate tariffs on US ethanol imports, facilitating the entry of 1.4 billion litres into the UK market. This measure is anticipated to lower costs for UK industries that use ethanol, such as manufacturing and transportation.
5. Support for the Whisky Industry:
   The resolution of the Section 232 tariff dispute has led to the lifting of tariffs on American whiskey. This development is expected to benefit UK spirits importers and the hospitality industry, while also encouraging greater investment in the UK spirits sector by US companies.
6. Commitment to Ongoing Trade Negotiations:
   Both nations have expressed a commitment to continue discussions on broader trade issues, including digital services taxes and pharmaceutical tariffs. These ongoing negotiations aim to further enhance bilateral trade relations and address remaining areas of concern.

This trade agreement represents a significant advancement in UK-US economic relations, providing immediate benefits to key industries and laying the groundwork for future cooperation.

For small and medium-sized enterprises (SMEs), adopting accounting software offers a range of practical benefits that help streamline financial management, reduce errors, and improve decision-making. Here are the key advantages:

Time-Saving Automation
Accounting software automates routine tasks such as invoicing, bank reconciliations, VAT calculations, and payroll processing. This reduces manual data entry and allows business owners and finance teams to focus on running and growing the business, rather than spending hours on admin.

Real-Time Financial Insights
Most modern platforms offer real-time dashboards and reporting tools. Business owners can instantly see cash flow positions, outstanding invoices, and profit margins. This helps with day-to-day financial decisions and longer-term planning, such as forecasting and budgeting.

Accuracy and Reduced Errors
Manual bookkeeping can lead to errors in data entry, calculations, or tax reporting. Accounting software includes built-in checks and reconciliation tools to minimise these risks. With fewer mistakes, businesses are less likely to face penalties or compliance issues from HMRC.

Simplified Tax Compliance
Cloud-based software is increasingly aligned with HMRC’s requirements, including Making Tax Digital (MTD). It helps SMEs maintain digital records and submit VAT and income tax returns directly from the system. This not only saves time but ensures timely and accurate compliance.

Better Cash Flow Management
With tools to track incoming payments, flag overdue invoices, and send automatic payment reminders, SMEs can manage credit control more effectively. Improved cash flow visibility makes it easier to plan for outgoings and avoid late payment issues.

Access Anywhere, Anytime
Cloud-based accounting software allows users to log in from multiple devices, enabling remote working and access for accountants or bookkeepers. This flexibility supports businesses that operate across locations or use outsourced finance support.

Scalability
Most accounting packages offer scalable features that grow with the business. SMEs can start with basic invoicing and reporting and add features like inventory management, multi-currency support, or project tracking as needed.

Integration with Other Systems
Accounting platforms often integrate with other business software, such as e-commerce, payroll, point-of-sale, and CRM tools. This creates a joined-up business system and reduces duplication of work.

Professionalism
Using accounting software can improve the presentation of invoices and financial reports, giving a more professional impression to clients, suppliers, and lenders.

In summary, accounting software helps SMEs improve efficiency, accuracy, and control, making it a worthwhile investment for sustainable business growth.

If you are still considering your software options, we can help. Call now…

HMRC has delayed mandatory payrolling of benefits in kind by a year to April 2027, giving employers and software providers more time to prepare. Penalties will be eased in the first year.

The requirement to report Income Tax and Class 1A National Insurance Contributions for most BiKs and expenses through Real Time Information (RTI) will now begin from 6 April 2027, rather than 6 April 2026 as previously announced.

From April 2027, employers will report BiKs and expenses via the Full Payment Submission (FPS), aligning with the method currently used for reporting salaries. The number of RTI fields will be expanded to reflect the data currently captured through P11D and P11D(b) forms.

The deferral is intended to give payroll professionals, software providers, tax agents and others additional time to prepare for the transition. From April 2027, employers will also have the option to payroll employment-related loans and accommodation on a voluntary basis.

To support a smooth rollout, HMRC will waive penalties for inaccuracies related to mandatory payrolling for 2027–28, provided there is no evidence of deliberate non-compliance. However, existing late filing, late payment penalties, and interest will continue to apply.

HMRC has confirmed that its Basic PAYE Tools software will also be updated to support payrolling of benefits in kind from April 2027.