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.

LHW99

https://forums.moneysavingexpert.com/discussion/comment/81663735#Comment_81663735

I realise this thread is somewhat old, but following on from what @TheNorthStar has said above - are the "brackets" for this purely for self-employed turnover, or do they encompass all income sources, as does the current online SA system?

For example if turnover from SE is around £15k pa, but you also have PAYE and SP income that takes you over the £30k bracket, will you have to participate in MTD or not?

molerat

Discussion on the tax board, the threshold applies to SE income.

https://forums.moneysavingexpert.com/discussion/6654909/making-tax-digital-mtd-for-landlords#latest

TaxSortedUK

The confusion is understandable - the name is genuinely misleading.

The difference is that right now you submit one tax return per year covering everything. Under MTD you'll submit a brief income/expenses update every quarter (4 times a year), then still do a final declaration at the end of the year. So it's more submissions, not fewer.

The "digital" part refers to the requirement to keep digital records and submit via software connected directly to HMRC's API - you can't just log into the HMRC website and type numbers in manually anymore. Everything has to come through approved software.

For most self-employed people earning over £50k it kicks in from April 2026. The quarterly updates themselves aren't that complex - it's basically just totalling up your income and expenses for the year so far and submitting. The software does the actual sending.

MPux

I had the same question when I first heard about MTD. The key difference is that MTD for Income Tax is not just about submitting digitally — it completely changes how and when you report to HMRC. Instead of one annual Self Assessment return, you'll need to submit quarterly updates throughout the year, plus a final declaration at the end. You also need to use HMRC-recognised software to keep your records — you can't just use a spreadsheet or do it manually anymore. If you earn over £50,000 from self-employment or property, this applies to you from 6 April 2026. Worth getting your software sorted now before the deadline hits.

rickwookie

https://forums.moneysavingexpert.com/discussion/comment/81935099#Comment_81935099

I think you CAN just use a spreadsheet, or even keep doing it manually and then just chuck the figures into a spreadsheet template every quarter, by using "bridging" software from one of the free providers such as mytaxdigital.co.uk

KKILP

Hi I have never used a software system, I do submit my yearly return to HMRC in January every year for the prev year self assessment, this is worrying me a: ive not been advised when to start I thought they would write out to you or email to tell you what year you were to start from, b: what best system to log onto to send the quarterly figures is the first submission April 26 or is it quarterly from April 26, Im so sorry for being dizzy but never used anything like this before

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81948747#Comment_81948747

If you are going to get caught the chances are you will have been inundated with emails about getting ready for MTD. And invitations to join webinars explaining it.

For 24/5 was your turnover more than £50k? Remember that is the gross figure not your net profit figure. And it is just the figure from your self employed source not other income (unless you also have rental income). If no then don't worry about it yet. If your turnover is going to be over £30k for 25/6 then worry about MTD for April 27 on. I think over £20k will get caught from April 28 although that may be up in the air still.

With some of the providers you don't need to use spreadsheets - you can just fill in figures manually on their site and upload it to HMRC. Other systems are more integrated and take figures from your bank account but I don't think that is mandatory (I certainly hope not).

But if like someone further up your bank will let you use freeagent for free it is worth playing with that to see if you can get comfortable with it. Some providers are "free" but I bet that won't last . There is a page on Gov.uk which may or may not help. I thought it had a list of providers but I can't see that now.

Choose the right software for Making Tax Digital for Income Tax - GOV.UK