HM Revenue & Customs’ (HMRC) Making Tax Digital initiative has been gradually evolving for several years now. But did you know that it will soon be mandatory for landlords and small businesses that pay tax through self-assessment to use HMRC’s digital tax system? Making Tax Digital for Income Tax & Self Assessment (or MTD for ITSA, as it’s more commonly known) is likely to be a major change for some taxpayers. So, are you ready for the upcoming MTD for ITSA rules? What is MTD for ITSA? Making Tax Digital (MTD) aims to bring tax into the digital age, moving from annual paper and online tax submissions to quarterly digital uploads of your tax information. Having to keep detailed digital records sits at the heart of MTD. Taxpayers will need to record all incoming and outgoing transactions using compatible accounting software, and then share this information in an approved digital format with HMRC. Who will be affected by the MTD for ITSA rules? MTD for ITSA is already at the beta testing stage and some self-assessment taxpayers have opted in to the system already. But if you’re a landlord or sole trader who falls into the following categories, MTD for ITSA will soon become a mandatory requirement: From April 2026, for those with qualifying income over £50,000 From April 2027, for those with qualifying income over £30,000 How do you get ready for MTD for ITSA? If you’re already using cloud accounting software to manage your finances, MTD for ITSA won’t be a major challenge. You’re already recording your numbers in a digital format and most of the popular accounting platforms will have MTD for ITSA templates you can fill out. But if you’ve not embraced the latest in accounting tech, it’s important to upgrade ASAP. To stay compliant, you’ll need to: Keep your records in a digital format Provide digital quarterly updates to HMRC Be able to provide your ITSA return information to HMRC through MTD-compatible software Talk to us about preparing for MTD for ITSA Contact us If you’re concerned about how MTD for ITSA may affect your finances, call us on 01904 787 973 or book a discovery call with Donald Inglis . We’ll advise you on the best accounting software and give you guidance on upgrading and preparing your bookkeeping, accounting and tax procedures for MTD for ISA.

Producing regular management information is one way to help improve your business decision-making. But looking at historical numbers can only tell you so much. In business, you want to know what the future holds. And to make truly informed decisions about your future strategy, it’s important to use forecasting tools to project your data forwards in time. By running projections, based on these historical numbers, and producing detailed forecasts, you can get the best possible view of the road ahead – that’s invaluable. Run regular cash flow forecasts Positive cash flow is vital to the short, medium and long-term success of your business. Without cash, you simply can’t operate the business efficiently. Running regular cash flow forecasts helps you overcome this challenge. With detailed projections of your future cash flow, you can spot the cash gaps that lie further down the road, and take action to fill these cash flow holes. Income can often be unpredictable, especially in challenging economic times. If customers fail to pay an invoice, or suppliers increase their prices, this can all start to eat into your available cash. Using forecasting, you can extrapolate your numbers forward to which weeks, months or quarters are looking financially tight. And with enough prior warning, there’s plenty of time to look for short-term funding facilities, or to get proactive with reducing your spending. Run sales and revenue forecasts Keeping the business profitable is one of the key foundations of making a success of your enterprise. You want your sales to be stable and your revenues predictable if you’re going to generate enough capital to fund your growth plans. And you need to know how those revenues will pan out over the course of the coming financial period. Revenue forecasts work much like a cashflow forecast. Instead of looking at your future cash position, a revenue forecast gives a projection of your sales and how much revenue is likely to be brought into the business in future weeks and months. With better revenue information, you’ll be more on top of your profit targets. You can manage your working capital in a more practical way. And you can improve your ability to invest in new projects, additional staff or funding of the long-term expansion of your business. Run different scenario plans What’s going to happen to your business in the future? None of us have a crystal ball to predict this future path exactly. But by looking at different possible scenarios, you can run projections to see what the potential outcomes and impacts may be. These ‘What-if scenarios’ can be exceptionally useful tools when thinking about big business decisions. What if there’s an economic recession? What if our sales increased by 25%? What if we raised our prices by 10% next quarter? What if we lost a quarter of our customers? By plugging the relevant data into your forecasting engine, you can run these scenarios and see how each option pans out. That’s massively useful when the worst (or the best) does happen. Update your strategy, based on your forecasts By making the most of your forecasting tools, you give your board, your finance team and your advisers the most insightful data and projections to work with. A good business plan is designed to flex and evolve to meet the needs of the changing market – and the changing needs of your own business strategy. By making use of your cash flow forecasts, revenue projections and what-if scenario planning, you give yourself the insights needed to update your strategy and your business plan. You can make solid, well-informed decisions and keep yourself one step ahead of your competitors. In the dog-eat-dog world of business, that’s a competitive edge that can make a huge difference. If you want to delve deeper into the positive benefits of forecasting, please do get in touch. We can showcase the latest forecasting software and apps, and show you the value that’s delivered through well-executed forecasting and longer-term projections. Call us on 01904 787 973 or book a discovery call with Donald Inglis .