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?)

Though in terms of the MTD stuff, keeping under the main threshold will only help for a year, as next year the limit is much lower. It might help more for the possible VAT threshold though, if it comes at the rumoured level, which I so hope it doesn't. That would be the real nightmare and worth keeping under the threshold if it's possible. I haven't yet worked out if I can and how, as no matter what it seems I'll lose a good chunk of income if they bring it in, either by paying the tax, by reducing my hours, or by raising my fees and thus losing work anyway.

https://support.freeagent.com/hc/en-gb/articles/115001219890-Self-Assessment-in-FreeAgent

I haven't RTFT but FreeAgent is free if you open a Mettle bank account. You don't even really have to switch to it, you just make one transaction a month and FreeAgent is MTD compliant.

I “attended” a webinar about MTD this morning (property income). Anyone who will have to start the new process in 2026 will receive a letter this month apparently. Annoyingly if for whatever reason your income qualifies in the first year but then falls below the qualifying threshold in subsequent years you will still have to use the MTD reporting for 3 years after first registering.

I usually use an accountant to do my tax return at a cost of £500 odd a year. I doubt they would do quarterly returns for me for the same fee so I’m going to look into software to DIY. It’s going to take way more of my time.

In the webinar this morning they said yes you could bunch together all your expenses and put them in the final quarter return if that works better for you.

@VanCleefArpels I imagine that lots of people haven't submitted their tax return yet, so they presumably won't be getting a letter from HMRC until after they do.
Starling bank have just notified customers that they're in the process of setting up something to do with MTD. It will be interesting to see what that is.
Does anyone know if and how you'll use Paypal with MTD? Paypal is a very useful way of invoicing people, as it provides the customer with some protection, so hopefully it will be compatible?

I don't know if you want to ask mumsnet to edit this but I think we may be involved in the same industry in the same area.

I think they said They are basing their income estimates on the 23/24 returns in terms of who might be eligible to do MTD starting in April 2026

There’s absolutely no personal or area info on either screenshot 🤷‍♀️

DH is obviously a gas engineer from my postings but there’s nothing even vaguely outing on the screenshots.

I now know he's done a service in Bradwell, granted there are a lot of houses & businesses in Bradwell and there are some names on the other screenshot but that's fine if you are Ok with that.

You might think there is nothing identifying but you have customer names on there and one of them I recognise.

I’m another sole trader who is dreading this. It will just mean more admin and another bill from my accountant. And for what benefit?

I'm not convinced that using your accountant for this is the best idea. You'll still have to buy and deal with software I think, and the whole thing will become astronomically expensive.

Having said that, I haven't used an accountant for a while, because they started charging too much for the annual tax return, but I think that for this I may need to get some advice on the best way forward. However, at the moment I don't think that accountants are fully on top of this (not their fault, the government's fault). Maybe we could use this thread as a resource as the early adopters get advice, decide on software and start using it? That should make it a little less burdensome for the low-profit sole traders when they're forced onto the new system.

We are lucky in that our (excellent) accountant for the limited company is also a family friend and he has said in the past that he would be willing to help ds with his accounts. Ds is still a student but we think he has gone over the tax threshold this year. Last year he had to submit a S/E but didn't earn enough to pay tax.

Dh has never used an accountant. He uses some kind of free software.

Just wanted to slightly correct you - the requirement for doing MTD returns is not on PROFIT. - it’s on gross income. It’s this aspect that is particularly annoying for property income where a lot of expenses can be deducted to calculate taxable income

Yes, I know and I agree with you. But it's the low profit sole traders who are going to be disproportionately affected by this, as they'll have to spend a lot of money and time despite not making much money from their business. The most disproportionately affected will be the high gross sales but low profit people, as they'll have to start on MTD earlier than the low gross sales low profit people. The government apparently intends to extend the scheme downwards - so people with a turnover of under £20K can expect to be brought into the scheme quite soon. Who knows how low they'll go. And I have no sympathy for them supposedly not understanding that people like tutors and music teachers exist. They live in the actual world too, so there's no way they're not aware of these small businesses. I'd assume that far more small businesses of that type exist now, because of the internet and the gig economy. In any case, they should have done full research on those affected and the likely impact before bringing in such huge changes.

I saw an ad today for Sage who are doing a free basic version for sole traders which I think I will use when I need to https://www.sage.com/en-gb/making-tax-digital/

I used Xero for work and would have preferred to use that as I'm used to it, but don't want to pay for it!

We used to use Sage at work & I ditched it for Moneysoft as it was so user unfriendly & we could never run the right reports.

I think you only have to do this if qualifying income is over £20,000

Oh no! I assumed as it was one of the better known platforms it would be ok!

I also wonder if that Sage offer is an introductory one, rather than permanent.

I don't think there will be any real, long term freebies.

I use starling for my business account and they are offering a subscription which says it will be compatible with the new system. The account is free and the subscription is £7 or £8 per month which seems like an ok deal. This is probably the way I will do it as I already bank with them so it makes sense.

@businessflop25 Will the Starling subscription cover things that are not in your Starling business account? Is it the full deal, or will you have to pay for something else in addition?