MAKING TAX DIGITAL
3 min read
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Download the free guide for UK sole traders and understand the key accounting records, deadlines and Making Tax Digital changes in plain English.
Making Tax Digital is a new way for some UK sole traders and landlords to report tax information to HMRC.
Instead of keeping paper records and sending one tax return at the end of the year, they must keep digital records and use approved software.
The software sends income and expense updates to HMRC every quarter. At the end of the year, a final submission confirms the correct figures and calculates the tax due.
Common misconception
Not true.
Quarterly updates are reports of income and expenses. They are not quarterly tax bills.
Think of them only as progress reports.
Making Tax Digital is mainly about keeping records digitally and reporting information more regularly. It is not a completely new tax system, and it doesn't mean sole traders have to pay tax four times a year.
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