Sole traders and landlords tax planning in Cheshire or Oswestry should be aware of looming tax changes. Taking effect from April 6 2026, these will impact self-employed people who report their income to HMRC.
Those landlords and sole traders earning in excess of £50,000 have been advised to act now before the new “Making Tax Digital (MTD) for Income Tax” rules come into place. Under the new system, an estimated one million people will need to use new software which provides HMRC with income and expenses updates. It is important to understand that these are not extra tax returns.
Upon completing a tax year, those eligible for “MTD for Income Tax” will still be required to fill out tax returns by the subsequent January 31. The software is designed to help people by retaining information from quarterly updates and saving time trying to source receipts or retrieve paper records.
“Making Tax Digital (MTD) for Income Tax” is being touted as the biggest change to declarations since self-assessment was introduced over 30 years ago.
To familiarise people with the new system, HMRC is offering free support in the form of online guidance, videos and webinars. It is hoped that it will help landlords and sole traders avoid last minute scrambles, whilst getting a better understanding of their tax affairs, and ensuring that people pay the correct amount of tax.
By spreading the admin load throughout the year, it is hoped that the last-minute tax return will become a matter of the past. People still in doubt may wish to check the GOV.UK website or set up an appointment with a professional financial adviser.
