I've not been paying attention: making tax digital??

[KatyMac]

Sorry i havent been paying attention to this but separate filing for each income stream?

So I make & sell and I teach and i lecture under one name

& I teach, do, lecture and create under another

So ill have to do 2 returns instead of 1 - is that right? Not one for teaching, one for making and selling etc

What is the cheapest app I have to buy to make this happen (after 2028 I think?)

Xero is very reasonable

Thanks i just found clear books which appears to be free

Which for a turnover of less than £6k is pretty important

But on hmrc it talks about a plumber and an electrician filing separately

But sewing, teaching, lecturing is surely one business?

I didn’t know about separate filing I could end up with 3! But really they’re all very closely linked.
The filing 4 times a year is going to be bad enough especially when my work is very seasonal.
Personally I think these tax changes which hardly anyone is talking about are much more important than a digital ID card. Unless they’re planning on linking to two up

Have you checked that you breach the turnover thresholds?

Oh I dont it's 20000 in 2028 & you never know I could be earning that by then!! pretty unlikely

But I was an early user of the self assessment online so if I can I will

I think it will help people who struggle with saving their tax as they will see it much more I realtime so its not a surprise (like that big double payment after you start a business)

But I do need the income stream thing clarifying

Just on the software aspect - there will be free bridging software available. So if you currently use excel to keep your records, you can carry on doing that, and just use the bridging software to file

Oh @Withinthewhirlwind that's interesting - I don't mind changing but that sounds good

Far too many small businesses/sole traders use accountants that don't need to imo - unless your tax is complicated its pretty straight forward

I've just been out of the loop for a bit and keep saying "I'll look later" 😆so this is me looking🙄

You only need to create separate MTD records if you are running more than one business. So just use the same as you are doing.

That makes more sense

I earn just over the £20k threshold.
I do my own accounts as that used to be my job.

I just object to paying for software to submit my accounts. And to the extra work this will give me.
Some software is free, but it's limited in what it can do.

I'm also told there are plans to make this compulsory for anyone who uses self assessment, no matter what their income is.

Government doesn't seem to like small businesses!

I wish I knew what they are hoping to achieve with this. My qualifying income will be a tiny fraction above the threshold. My accounts are so simple and straightforward, they would literally fit on the back of an envelope.

I don’t object to paying estimated taxes quarterly, but I simply cannot see the point of MTD.

OP, how do you do your accounts at the moment? If you're registered as a sole trader and file both self-employed roles under that sole trader tax return, then it should be the same for MTD. I think the confusion is over what a 'business' is when HMRC talks about filing separately for separate businesses – some examples they give are sole trader; landlord; contractor. You want to focus on sole trader, here – as a sole trader, you officially trade under your name, but you can have however many jobs/branches/side hustles/'company names' as you need all included under your one name as a sole trader.

Yes, OP is a sole trader (I know them in real life)

Thanks @Comefromaway

Yes sole trader so one lot of books/accounts - so type of business, not different strands - thanks

I didn't think it would be too complicated!

So nownits just the app/software and its compatability/ease of use

@KatyMac Being Freelance did a live on LinkedIn the other day that covered software and how it all works. They suggested several free ones. The recording is available on their page if you want to check it out.

Do you have a link please?

The only webinars I could find are future ones.

Having been retired for a while I lost touch with LinkedIn…

@Enrichetta Here’s the link: https://www.linkedin.com/posts/being-freelance_theres-been-a-lot-more-questions-in-the-activity-7374747221751177217-NDDO?utm_medium=ios_app&rcm=ACoAAAWrIRsBbZk30Zs5i6Q1aDBBP8GCz4LAE-A&utm_source=social_share_send&utm_campaign=copy_link
Steve (who runs Being Freelance) organised it with an accountant and someone from Free Agent. They do mention what Free Agent can do but it’s not a selling thing and they discuss other options including bridging software.

I know two small businesses that use this as bridging software £40 a year I think...https://www.absoluteexcelvatfiler.co.uk
Might be worth a look...

Just seen this thread. I dread doing my tax return - it wipes out that part of the year for me. And now this will make things far, far worse. I will definitely lose quite a few working days over this. Multiply that by all the self-employed people who don't take this kind of thing completely in their stride... Why do governments not care about fucking up people's working lives, adding to their costs and reducing their productivity? I want to be able to continue to work into old age, and this makes that idea much less attractive.

If you get a free Mettle business bank account, you get freeagent software for free.
It makes doing your books simple.
You link it to your bank feed and your hmrc account, you upload photos of any OOP expense receipts. You can create and send invoices direct from the app.

It’s slightly more work if you get any payments in cash ( I created a ‘virtual’ cash bank account for that, but for bank/paypal etc. It takes less than an hour a week to keep it updated.
If DH didn’t get it for free we would definitely pay for it.

You can also see your tax position in real time as long as you keep things up to date.

@BorgQueen I find that hard to envisage. Do you link your paypal account to it somehow? I also pay for some things from my personal account at the moment - I find my personal account easier to deal with, as I'm not restricted to using my phone as I am for the business account - plus I can take advantage of Amazon free delivery by buying personal and business items at the same time. I then make a separate record of the business items for the tax return. I'm more of a manual person and there are a few complexities with my business . With the software you use, is it possible to sort everything out manually every couple of months and manually enter onto the software to covey the figures to HMRC?

I'm the same, @bkclb, and the prospect of MTD fills me with trepidation. My accounts are so simple and straightforward, the data literally fit on the back of an envelope. I have been using Excel solely in case I am ever audited - I literally transfer my written records to Excel when I am doing my taxes.

I really hope it will be possible, as you say, "to sort everything out manually every couple of months and manually enter onto the software to covey the figures to HMRC". Which would still be a waste of my time, but at least I feel I might be able to manage this, instead of having to pay someone to do it for me.

Does anyone know? I've had a look at some of the software, and some of it seems to be really expensive, with just a cheap 1st 6 months or something. I think they'll soon be charging a lot for this, just to make our lives more difficult, and I only earn around minimum wage averaged out. All time and mental energy spent on this takes away from the business. I could just about understand requiring 2 tax returns or equivalent a year, but 4 times a year for a low-paid sole trader feels more like persecution.

Will it be four full returns per year? Or some sort of halfway house figures submission? I’m wondering what my accountant will charge, surely not 4 x the fee I pay once a year at the moment.