Making Tax Digital What You Should Be Doing Now
EPISODE 11
April has gone. The paperwork has not.
Making Tax Digital for Income Tax is already running for the first group of affected sole traders and landlords. If that includes you, the job now is to keep your records working and get the next update ready. If you join in April 2027, you have time to build a sensible routine before it becomes compulsory.
Being good with computers does not automatically make your bookkeeping digital. A folder full of receipt photographs is a start. It still needs to become a reliable record of what the business earned and spent.
Check which group you are in
Subject to exemptions, the timetable depends on qualifying income from the relevant tax year. Over £50,000 in 2024 to 2025 meant starting on 6 April 2026. Over £30,000 in 2025 to 2026 means starting on 6 April 2027. Over £20,000 in 2026 to 2027 means starting on 6 April 2028.
Qualifying income broadly means gross income from self employment and property combined, before expenses. It is not simply the profit left after buying parts and paying the rent. Ask your accountant to confirm the calculation and any exemption that applies to you.
This article concerns Income Tax for individuals. Running a repair shop or calling yourself an MSP does not, by itself, decide whether these rules apply. Check your business structure and personal tax position. Do not confuse this rollout with the separate Making Tax Digital rules for VAT.
Put 7th of November in the diary
For those already using the system, the next quarterly update deadline is 7 November 2026. Under standard periods, the update covers 6 April to 5 October. Under calendar periods, it covers 1 April to 30 September. The submission deadline is the same.
These updates are cumulative. The next one covers the year so far, not just the latest three months. Confirm the period your software uses before you start chasing figures.
The first update deadline was 7 August. If you should have started but have not, speak to your accountant or HMRC now, arrange registration and software where needed, and agree how to bring the records and submissions up to date. Waiting for January will not make the missing months easier to reconstruct.
Understand the breathing space
HMRC is not applying penalty points for late quarterly updates during the 2026 to 2027 tax year. That gives businesses some breathing space while they get used to the system. It does not remove the requirement to keep digital records and send the updates needed before submitting the tax return.
It is also not a blanket holiday from tax deadlines or penalties. The online Self Assessment return for 2025 to 2026 is still due by 31 January 2027. That covers the year before this first Income Tax rollout began. Check your filing and payment dates with your accountant and keep them separately recorded.
Use the breathing space to fix the process. Do not use it to develop a larger and more confident pile of receipts.
Give the records a weekly appointment
A busy workshop can swallow a day without anyone noticing. A customer arrives, a part is wrong, a laptop develops a second fault and the bookkeeping quietly moves to tomorrow. Repeat that often enough and tomorrow becomes a very unpleasant weekend.
Put a short, protected appointment in the diary each week. Capture sales and purchases, check missing receipts and review anything you cannot explain. Reconcile the bank account regularly so the records agree with what actually moved through it.
A bank feed helps, but it cannot always explain a transaction. Money transferred between your own accounts is not automatically a new sale. A refund needs recording properly. Ask how your software handles these situations before you trust the total on its dashboard.
Make it fit the way you work
For a repair shop, bring counter sales, repairs, online orders and card payments into a consistent process. Check how card fees and settlement delays appear so you do not mistake the amount arriving in the bank for the full sale.
For a callout technician, capture parking, parts and mileage while the details are fresh.
A receipt abandoned in the van will not become clearer after three months beneath a sandwich wrapper.
For a sole trader providing managed support, check recurring invoices, software charges, credits and project work. A recurring payment deserves the same attention as an ordinary invoice. Neither should disappear into a category called something vaguely computer related.
These habits also help businesses outside the current Income Tax rollout. Accurate records tell you what is happening while you still have time to do something about it.
Agree who does what
Do not assume the accountant handles everything. Do not assume they know what every supplier payment bought, either.
Ask them to walk through one complete job with you. Record the invoice, the part purchase, the payment and a possible refund. Agree who captures the information, who checks it and who sends each update. Put a date against the handover so missing information can be chased before the submission deadline.
Jenni and I still needed clear responsibilities when we ran a business together. Knowing each other well did not remove the need for records. Little and often was far easier than trying to rebuild the story from memory under pressure.
Use October properly
If you are already in scope, use this week to check your registration, software connection and first update status. Then review the records needed for November and book time with whoever handles the submission.
If you join in April 2027, use your 2025 to 2026 figures to confirm that position. Choose suitable software with your accountant and practise the weekly routine now. You want to discover an awkward import or missing receipt process on an ordinary Tuesday, not on the evening before a deadline.
Making Tax Digital is a continuing job. October is a useful moment to get that job under control. A carrier bag of receipts is not a filing system, however loyal the bag may be.
Next week, we will look at controlling credit before late payment controls you.
About the author
Written by Philip Griffiths of Tech For Techs Group Ltd, drawing on his experience of owning and operating a nationally award winning computer repair business.
Comments