Murray Beith Murray LLP is a leading Scottish private client law firm.
For 175 years we have specialised in meeting the legal, financial and administrative needs of individuals and families, family trusts, charities and private companies.
Murray Beith Murray LLP is a leading Scottish private client law firm.
For 175 years we have specialised in meeting the legal, financial and administrative needs of individuals and families, family trusts, charities and private companies.
Making Tax Digital (MTD), or Making Tax Difficult as some critics would say, is due to become mandatory for self-employed business owners and landlords from April 2026.
The long-delayed initiative is part of the government’s drive to promote better and more timely record-keeping, thereby reducing errors and mistakes in the tax system. Yet as the delays to this initiative have shown, making the tax system more efficient might not be so straightforward for taxpayers.
From 6 April 2026, if a taxpayer is self-employed or a landlord who has a combined annual business/property income of more than £50,000, they will be required to sign up for MTD.
This threshold will fall to £30,000 from 6 April 2027, and fall further to £20,000 from 6 April 2028, thereby greatly increasing the number of taxpayers who are likely to be impacted by the measure.
It should be noted that the threshold is related to income, and unfortunately not profits.
MTD taxpayers will be required to keep digital records and submit quarterly updates of their income to HMRC, something that is presently only reported annually.
A final submission will be required to collate all four quarters, and this will replace the reporting of this type of income on a UK Self-Assessment Tax Return.
For taxpayers who only have rental and/or self-employed income, this may negate the need to complete annual Self-Assessment Tax Returns. However, for those taxpayers who have income which is not taxed at source, and rental and/or self-employed income, then they could be in the unfortunate position of having to complete quarterly MTD reporting and a Self-Assessment Tax Return.
The actual payment of tax remains unchanged, tax will continue to be payable on the self-assessment deadline of 31 January, and 31 July for any payments on account.
Murray Beith Murray will be offering assistance in the completion of MTD Quarterly Returns, and we are aware that HM Revenue & Customs will be writing to taxpayers impacted shortly.
This article was written in conjunction with Tax Assistant, Alexander Massie.
If this article has raised any questions or you would like to discuss your affairs with our specialist lawyers or tax advisors then please complete our contact form or call 0131 225 1200.
Murray Beith Murray LLP is a private client practice, made up of specialist lawyers from a variety of legal disciplines, including experts in asset protection and estate planning. The firm was established in 1849, as advisors for generations of clients, committed to our values of integrity, expertise and trust. This aim and these values continue to this day as does our commitment to be here when you need us.
