Making Tax Digital is HMRC’s biggest change to the tax system in a long time.
Over the next few years, it’ll have an impact on self-employed individuals across all sectors, as well as landlords and the agents who work on their behalf.
From this April, many self-employed people and landlords will need to make changes to the way they keep records and report income.
Here’s what Making Tax Digital could mean for your Swadlincote business, and how Buckler Spencer can help you get prepared.
What is Making Tax Digital?
Making Tax Digital for Income Tax is about to replace the traditional once-a-year Self-Assessment return for certain taxpayers.
Instead of one annual submission, self-employed workers, landlords and agents working on their behalf will now need to submit quarterly updates on their company finances. This will need to be tracked using approved bookkeeping software and manual records, such as spreadsheets, will no longer be compliant.
The first update will be due on 7 August 2026.
The aim is to improve accuracy of record keeping and give HMRC a more up to date view of your income. Your approved bookkeeping software will be designed with capabilities for providing data for quarterly reporting and your end-of-year tax return.
The first phase of the Making Tax Digital rollout will begin from April 2026 for those with income exceeding £50,000. This will expand to those with lower incomes over the following years, so even if you don’t fall into that bracket yet, it’s still worth getting prepared.
Who will Making Tax Digital apply to?
Anyone who is self-employed, or a landlord making money from rental income will be eligible for Making Tax Digital.
This includes sole traders such as freelancers, contractors and those running side businesses alongside employed work. It also applies to anyone earning rental income above the threshold amount.
At present, Making Tax Digital will not apply to income through PAYE, partnerships, dividends (including from your own company), state or private pension income.
People below the £50,000 income threshold also need not take action yet, but should be aware that this will filter down in coming years.
What will you need to do under Making Tax Digital?
The first change will be a move to entirely digital records maintained on approved software. Spreadsheet or paper copies will no longer be considered sufficient evidence. HMRC has created a software finder to help you find a provider that best fits your needs.
You’ll need to send four updates a year, summarising your income and expenses. These aren’t tax bills, but you’ll be able to see an estimate of your tax bill to help you plan ahead for the rest of the year.
At the end of the tax year, you’ll confirm your final figures, submit a final declaration and pay your tax bill. This will replace the annual Self-Assessment return.
How will this affect small businesses in Swadlincote?
In theory, this should help spread the burden of financial reporting across the year. In practice, it may feel like more admin, as tax reporting becomes a year-round process.
More submissions mean more chances for errors if you don’t keep accurate records. It’ll be important to make sure that you’re confident with using your chosen software from the start, to avoid mistakes that can lead to penalties and enquiries.
How Buckler Spencer can help you prepare
At Buckler Spencer, we’re committed to helping local businesses in Swadlincote to make sure they are prepared for Making Tax Digital. We can support you and your business by:
- Offering advice on choosing approved bookkeeping software that’s right for your business.
- Helping to set up your software to track processes in your business.
- Managing quarterly updates and year-end submissions on your behalf.
- Ensuring everything is accurate, compliant and submitted on time.
- Providing clear advice and explanations of what everything means during the reporting process.
- Advising you on allowable expenses you might have missed.
Preparing early will help you to avoid last minute stress, which can lead to costly errors. It will also give you time to adjust gradually and identify any areas of concern before they become a pressing problem.
In the long term, Making Tax Digital could actually help you to understand your business better, keeping a closer track on your finances and tax requirements. Regular reporting can improve cash flow planning and decision-making. However, in the short term, change can feel overwhelming.
Making Tax Digital is a big change, but you don’t have to handle it alone. At Buckler Spencer, we support businesses across Swadlincote with practical, friendly advice to make sure you’re compliant, confident and ready for the change.
If you feel you’d benefit from clear tailored advice before the new rules come into force, or you’re looking for a reliable team to take the work off your hands, contact us today to discuss how we can help you.