Stratford-upon-Avon
13 The Courtyard
Timothy's Bridge Road
Stratford-Upon-Avon
Warwickshire CV37 9NP
Are you ready for Making Tax Digital for Income Tax (MTD for IT)? This new way of reporting will become mandatory in phases from April 2026. If you are self-employed or a landlord earning over £50,000, now is the time to prepare for digital record keeping, quarterly updates and the new penalty system that will apply under MTD for IT.
The date from which you must start using MTD for IT depends on your level of qualifying income. If your qualifying income exceeded £50,000 in the 2024–25 tax year, you will need to use MTD for IT from 6 April 2026. If your qualifying income exceeded £30,000 in the 2025–26 tax year, you will need to use MTD for IT from 6 April 2027. Where qualifying income exceeds £20,000 in the 2026–27 tax year, the government has confirmed that MTD for IT will apply from April 2028. Qualifying income is defined as the total income you receive in a tax year from self-employment and property before expenses.
You are currently exempt from MTD for IT if you meet specific conditions that automatically exempt you from the service, such as reasons relating to age, disability, or location, if you have applied for and been granted an exemption by HMRC, or if your qualifying income is £20,000 or less in a tax year.
HMRC’s guidance on MTD for IT has been updated and now includes further information on both permanent and temporary exemptions. It explains which exemptions apply automatically and which require an application. Permanent exemptions are generally automatic and continue to apply unless your circumstances change. You will need to apply for an exemption if you believe you are digitally excluded from using MTD for IT. If you are not required to use MTD for IT, you must continue to report your income and gains through the self-assessment tax return where applicable.
Grenfell James Technology Adoption Index
How does your business perform against others adopting financial tech? Find out with our interactive diagnostic:
1.
How does your business receive invoices?
A)
Invoices are mainly received in paper form
B)
Invoices are mainly received by email
C)
Invoices are emailed then automatically forwarded to a designated mailbox
2.
How are purchase invoices processed?
A)
Invoices are entered manually
B)
Invoices are attached to manually raised invoices
C)
Automated software (e.g. ReceiptBank, 1Tap, HubDoc etc) collates invoices
3.
How are accounts processed?
A)
Using Excel/paper-based
B)
Using Computer-based, offline software
C)
Using cloud-based accountancy software
4.
How often is business data revised?
A)
Data is updated annually
B)
Data is updated quarterly
C)
Data is updated monthly or more often
5.
How is banking updated for your business?
A)
Banking is updated manually
B)
Banking is updated by imports
C)
Banking is updated via a live feed
6.
How are bank payments made?
A)
Bank payments are manual
B)
Bank payments are made using bulk imports
C)
Bank payments are made directly via accounting software
7.
How are bank receipts reconciled?
A)
Receipts are chased and reconciled manually
B)
Receipts are chased and reconciled automatically
C)
A third-party platform is used to chase debts and collect fees
8.
How often are management reports produced?
A)
No reports are provided
B)
Reports are provided but often too late to be valuable
C)
Reports are automated with real-time information
Score 8-12:
Curious Exploration
Your financial technology phase is Curious Exploration
% of respondent businesses are in this phase too.
Switching accountancy systems may seem like an upheaval, but can be much more straightforward than most businesses imagine. From talking to our clients, they have found moving from paper invoicing and desktop-based accounting software to the cloud and apps quickly makes the transition process a worthwhile investment of time. Digital accounting solutions bring in streamlined processes, up-to-date business data and greater confidence in the accuracy of information when making financial decisions.
Grenfell James works with your team to fully assess the needs of your business and minimise the impact of any transitions for solutions we recommend.
Score 13-19:
Measured Discovery
Your financial technology phase is Measured Discovery
% of respondent businesses are in this phase too.
Once cloud accountancy software is in place, there’s still plenty of scope to improve your accountancy processes and make sure your business is maximising the benefits of adopting a digital accounting solution. Grenfell James assesses each business to understand how any implemented solutions are being used, identify areas for improvement and the needs of the business overall to support your business goals and achieve success.
Our team of experts can discuss a range of time-saving automation and get different apps and cloud-based solutions talking to create and manage a digital accountancy eco-system to help your business grow.
Score 20-24:
Bold Innovation
Your financial technology phase is Bold Innovation
% of respondent businesses are in this phase too.
You know the benefits of accounting technology and the impact it can have on your business goals. If you want to take it a step further, our team can conduct a systematic review of your processes, apps and business goals to ensure your digital accountancy ecosystem is keeping pace with the changing needs of a growing business.