Now that MTD for Vat has become accepted HMRC are moving on to Income tax. The aim is to reduce errors and modernise the tax system. The hope is also to reduce the tax gap. For those unsure about how to cope with these changes, a trusted Hackney Accountant can help you plan ahead and minimise the tax burden.
This effects individual tax payers not companies and does not include dividends..
There seems to be no consideration of the costs effect on taxpayers. Comments have been made to the effect that HMRC might like to eventually tie this in to tax payments.
New Tax Rules 2026
New rules from April 26 will affect all taxpayers with gross turnover over £50,000 reducing to £30,000 in 27 and £20,000 in 28.
Sole traders and landlords (including foreign property income) will be covered. The gross revenue issue makes a clear defining point.
Other income will still be covered by the standard self-assessment form.
What are the exclusions?
There are exclusions:
1. Trusts and Estates
2. Registered pension schemes
3. Non-resident companies
4. Individuals with no national insurance numbers
5. Foster carers
6. The digitally excluding including the elderly, disability, religion etc.
Taxpayer Requirements
Taxpayer must keep digital records of revenue and expenses. Spreadsheets will be allowed using bridging software.
They must submit quarterly updates to HMRC through HMRC approved software.
Submit a final declaration by 31st January after the tax year end. This will replace the traditional tax return. At this point tax adjustments should be included.
What’s involved
The quarterly updates will include revenue and expenses similar to the current tax return. No tax adjustments will be included.
Deadlines are the 7th of the month 1 month after the period covered. Ie for a period to 30th June the return would need to be submitted by 7th August.
Important points to note
The £50,000 does not include salary income.
Spreadsheets can still be used with bridging software,
There will be penalties for late submission.
The Threshold is for the taxpayer’s total income, not per business.
If you’re a taxpayer and need help in the upcoming tax changes an experienced Accountant in Hackney such as us can support you with our professional services. Get in touch for more.