Self Employed: "Making Tax Digital"? But I already submit tax returns online (i.e. digitally)

andrewilley

I'm in my early 60s (OK, nearer mid 60s, cough) but still work part-time on online/tech stuff from home. I've been using the online (thus digital) Tax Return submission system for ages, which is pretty easy as I only really need to work out 4 numbers once a year: Income (totalled from 24 payment receipts a year), expenses (entered as a simple one-figure consolidated value), interest on non-ISA life savings, and total payments into a pension. That's it.

Net earned income is usually around or a bit below the lower tax threshold, and savings interest remains below the extended 'starting rate' level. So all pretty minimal stuff really, and kept in a spreadsheet which I update once a year when I have all the annual interest summaries, before filling in and transmitting my Tax Return. Then I pay HMRC whatever the system calculates is necessary. Simples.

However I keep getting nagging emails from HMRC about "Maxing Tax Digital" - but as far as I'm concerned, that's what I'm doing already. I certainly don't want to start messing around with calculating anything more often, or in a more complex way than a simple spreadsheet giving me those four numbers to copy into my annual Tax Return.

Everything I've Googled seems to be talking about using special accounting software, with mandatory quarterly updating, and all sorts of other nonsense that ought to be irrelevant to me - is any of that actually necessary? Or desirable? Or simpler?

Andre

QrizB

I think is currently only being rolled out to those earning more than £20k pa.

https://www.gov.uk/government/collections/making-tax-digital-for-income-tax-for-businesses-step-by-step

TheNorthStar

The new system means you will need to submit quarterly tax returns similar to what a VAT registered company would have to do.

The following brackets apply

Turnover £50,000 for the 2024 to 2025 tax year, you will need to use it from 6 April 2026

Turnover £30,000 for the 2025 to 2026 tax year, you will need to use it from 6 April 2027

This currently doesn't apply if your turnover is less than £20,000 per year.
Totally painful !!

Chief_of_Staffy

Yes, I just found out about this BS that I'll have to use from April. In my case I think I can just link Freeagent, which is provided free by my bank, to my business account and have it log all transactions, then I'll just categorise each one. If I'm expected to do more than that I might just retire.