VAT & MTD – FinTax Consultants

Making Tax Digital for Income Tax: who is in, and when

admin — Tue, 15 Sep 2026 09:00:00 +0000

Making Tax Digital (MTD) for Income Tax changes how sole traders and landlords report to HMRC. Instead of one annual return built from a shoebox of receipts, you keep digital records and send short quarterly updates through compatible software.

Who has to join

From 6 April 2026: qualifying income over £50,000 (based on your 2024/25 return).
From 6 April 2027: qualifying income over £30,000 (based on your 2025/26 return).
From 6 April 2028: qualifying income over £20,000 (based on your 2026/27 return).

Qualifying income is your gross income from self-employment and property added together, before expenses. A landlord with £22,000 of rent and a sole trader business turning over £15,000 has £37,000 of qualifying income, even if profits are much lower.

What you will need to do

Keep records of income and expenses digitally, in MTD-compatible software.
Send a quarterly update by 7 August, 7 November, 7 February and 7 May.
Submit a final declaration by 31 January after the end of the tax year.

Quarterly updates are summaries, not mini tax returns. They do not change what you pay, but late updates can build up penalty points.

Getting ready without the stress

Check your qualifying income for the relevant year now.
Open a separate bank account for the business or lettings if you haven’t already.
Choose software that links to your bank feed so most transactions record themselves.
Start photographing receipts as you get them, rather than in a batch at year end.

How we help

We set up the software, connect your bank, agree a simple monthly routine and file the quarterly updates for you. You keep running your business; we keep HMRC informed.

This article is general guidance based on the rules for the 2026/27 tax year. It isn’t personal advice — talk to us before you act on it.

The £90,000 VAT threshold: when you must register

admin — Tue, 08 Sep 2026 09:00:00 +0000

The VAT registration threshold is £90,000 of taxable turnover. Growing businesses often cross it without noticing, because the test is not based on the tax year or your accounting year.

The two tests

Looking back: if your taxable turnover for the last 12 months goes over £90,000, you must register within 30 days of the end of the month in which you went over.
Looking forward: if you expect your turnover in the next 30 days alone to go over £90,000, you must register by the end of those 30 days.

Check the rolling total at the end of every month. A strong summer or one large contract can tip you over.

Why timing matters

If you register late, HMRC can ask for VAT on every sale you made since the date you should have registered — whether or not you charged it to your customers. That money usually comes straight out of profit, and penalties can apply on top.

Should you register voluntarily?

Registering below the threshold can make sense if most of your customers are VAT-registered businesses, or if you buy a lot of equipment and want to reclaim the VAT on it. If you sell mainly to the public, adding 20% to your prices may cost you customers.

Schemes worth knowing

Flat Rate Scheme: pay a fixed percentage of turnover, available if your taxable turnover is £150,000 or less.
Cash Accounting Scheme: pay VAT when customers pay you, rather than when you invoice.
Annual Accounting: one return a year with regular interim payments.

How we help

We monitor your rolling turnover monthly, tell you before you reach the threshold, handle the registration and file your VAT returns through Making Tax Digital software.

This article is general guidance based on the rules for the 2026/27 tax year. It isn’t personal advice — talk to us before you act on it.

Landlords: Making Tax Digital and new property tax rates

admin — Tue, 28 Jul 2026 09:00:00 +0000

If you let property, the next few tax years bring more change than most landlords have seen in a decade. Here is what is happening and what to do about it.

Making Tax Digital applies to rental income

MTD for Income Tax covers landlords as well as sole traders. It started on 6 April 2026 for people with qualifying income over £50,000 and extends to over £30,000 from April 2027 and over £20,000 from April 2028. Qualifying income is gross rent plus any self-employment income — before expenses. If you own property jointly, you count your share.

Once you’re in, you keep digital records, send quarterly updates and file a final declaration after the year end.

New property income tax rates from April 2027

From April 2027, property income will be taxed at its own rates: 22% basic, 42% higher and 47% additional — two percentage points above the standard Income Tax rates. For many landlords, that means a higher bill on the same rent.

Steps worth taking now

Check your qualifying income and whether you are already inside MTD.
Separate rental money from personal money with a dedicated bank account.
Review how property is owned. Ownership between spouses, or through a company, changes who pays tax and at what rate — but moving property can trigger Capital Gains Tax and Stamp Duty Land Tax, so get advice first.
Keep a full record of finance costs, repairs and letting fees; none of it helps if you can’t prove it.
If your rental income is small, the £1,000 property allowance may be simpler than claiming expenses.

How we help

We look after landlords’ records, quarterly updates and returns, and model the effect of the 2027 rate changes on your portfolio so you can plan rather than react.

This article is general guidance based on the rules for the 2026/27 tax year. It isn’t personal advice — talk to us before you act on it.