Once you join Making Tax Digital (MTD) for Income Tax, you must submit 4 quarterly updates to HMRC using compatible software. These are not tax returns—they are summary reports of your income and expenses for each quarter. Quarterly updates do not calculate the tax you owe. Instead, they provide HMRC with an overview of your…
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A UTR (Unique Taxpayer Reference) is a unique 10-digit number issued by HMRC to identify you for tax purposes in the UK. A UTR is required for self-employed individuals, partners in partnerships, and anyone who needs to file a Self Assessment tax return. It allows HMRC to link your tax records to your account. Without…
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From 6 April 2026, Making Tax Digital (MTD) for Income Tax becomes mandatory for landlords whose combined gross income from property and/or self-employment exceeds £50,000 per year. Please note that the threshold is based on gross income before expenses, not profit. The threshold will reduce to £30,000 from April 2027 and £20,000 from April 2028.…
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Paying dividends without sufficient retained profits is one of the most common mistakes made by company directors. Dividends can only be paid if the company has enough distributable profits available. Another frequent issue is failing to prepare the required paperwork. Every dividend payment should be supported by the appropriate documentation, including board minutes and dividend…
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Receiving dividends from a UK limited company can be a tax-efficient way to take income, but dividend payments are still subject to tax. The amount of tax you pay depends on your total taxable income and the current dividend tax rates. Dividends can only be paid from company profits after Corporation Tax has been accounted…
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One of the biggest misconceptions about Making Tax Digital is that HMRC gains full access to your bank accounts or accounting system. In reality, HMRC only receives the tax information required for reporting through MTD-compatible software. Making Tax Digital does not mean your business is under constant monitoring. Its purpose is to improve the accuracy…
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Transitioning to Making Tax Digital can be more challenging than many businesses expect. The five most common mistakes are leaving the transition until the last minute, using software that isn’t MTD-compatible, failing to maintain digital records, submitting inaccurate financial data, and not seeking professional advice. Any of these mistakes can lead to delayed submissions, unnecessary…
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Significant changes to Employer National Insurance Contributions (NICs) came into effect on 6 April 2025 and continue to apply during the current tax year. These updates affect payroll costs and should be taken into account by all UK employers. The Employer National Insurance rate increased from 13.8% to 15%, while the Secondary Threshold—the point at…
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The end of the tax year is the ideal time to review your finances and ensure your tax affairs are in order. Taking the time to check everything in advance can help you avoid errors, maximise available tax reliefs, and prepare for your upcoming tax return. It’s important to ensure that all income and expenses…
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Setting up a Limited Company in the UK is a straightforward process when you have the necessary information prepared. Providing accurate details from the start helps avoid delays and ensures your company is registered correctly with Companies House. To register your Ltd, you will typically need proof of identity and address for each director, your…
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