Making Tax Digital

Because rental income isn't the same thing as profit.

You also then have to think about making tax digital for income tax if you're a landlord with over £50,000 income at the moment, £30,000 income from April 2027.

Just because somebody pays you £1,000 a month in rent doesn't mean you've made £1,000.

you have got expenses to consider and then potentially tax on the profit.

And then for me, like, that, that real kick in the nuts, like, I was, I was already fuming at this point.

Um, but the final, like, nail in the coffin for me was, yeah, you've already mentioned th- this whole idea about, well, there is gonna be a payment regime connected to Making Tax Digital, but it's not just, "Here's your quarterly payment, and let's, let's, let's put contribution to that." It's, "Let's change the, the, the, the, um, the what do you call it? Payments, the payment accounts based on it."

Payment accounts, yep.

And I'm like, but the payment account was already a broken solution that was just there just to increase y- the revenue's way of getting cash in earlier.

Th- this it seems like the most sensible way, when they could have made the tax digital and made it more, more straightforward.

Chose not to do that.

And then, I don't know if you also read, we're not gonna bother bringing everyone into Making Tax Digital.

We're gonna defer that f- indefinitely.

oh man remember we had the podcast about that back in the day do you remember yeah

yeah yeah so hmrc's crypto tax is developing they're getting more aware of the situations they've decided and i think it's quite logical that stablecoin actually tracks uh dollar or pound or whatever you're tracking and therefore it's more akin to money and therefore they will tax it to you on income which means 20 40 45 or in fact i think it's probably going to be classed as savings income so 24 44 49 percent um and won't be taxed in cgt this is just a quick one we've got uh two more in the bad category um let's go to e-invoicing um So making tax digital has been around for, where are we now? Six months? Almost seven, eight months, maybe.

I will move on to that in the good category in a minute.

There are some positives from the budget there.

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Awesome.

Okay, so MTD, Making Tax Digital.

I mentioned it earlier.

If you're a freelancer, artist, charity, not-for-profit organization, landlord or small business owner, this episode is for you.

There's plenty in the budget that's going to affect how you report income, pay tax and employ staff and plan for the future we're not going to get mired in the world of politics here we're going to focus on what matters in practice there will be some numbers sprinkled throughout the podcast for more detail check out the show notes for a link to our rates and allowances table Making tax digital moves forward.

One of the bigger announcements in the autumn budget, 2026 for small businesses, is that making tax digital, NTD for short, is continuing as planned.

From April 27th, 6th of April to be precise, landlords and sole traders with qualifying income in excess of £30,000 are going to be bought into the system.

And that's going to be based on the tax return 2526 income.

So at the moment, most people pay self-assessment and they submit information to HMRC and they're doing that twice annually.

But of course, with the advent of making tax digital, which means the tax office want more frequent information, that's also coming down the lane is more frequent payments so the idea of the fact that you earn all of your money till the end of March and then you get nine months before you actually have to pay the tax bill on it actually a lot of that is going to be brought forward because they want to encourage more early receipts into the tax office for fairly obvious reasons which may affect the cash flow planning for quite a few associate dentists out there and indeed self-employed sole trader practice owners who've suddenly got to pay their tax bills a lot earlier than they used to

So this makes it much more of a pain or a burden than to do self-assessment basically.

Yeah, absolutely.

MTD Penalty Soft Landing and Exclusions The Government has confirmed that taxpayers who are due to join Making Tax Digital for income tax from April 2027 will not be given penalty points for late submission of quarterly updates for 2027-28.

While there was a commitment in today's Budget to continue with the roll-out of MTD for income tax, there were two key announcements in the Budget detail.

First, for the 2027-28 tax year, there is an extension to the late filing penalty soft landing to those taxpayers who are due to join MTD in April 2027.

Second, it was confirmed that four groups of taxpayers will not need to join MTD until further notice.

A late filing penalty soft landing applies for MTD income tax in 2026-27.

Under the soft landing, taxpayers that are late filing quarterly updates for 2026-27 are not awarded a penalty point.

For further details of the penalties that apply under MTD income tax, including the soft landing, see the guidance on ICAEW.com.

This penalty soft landing has been extended to those taxpayers who are due to join MTD income tax from April 2027.