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Making Tax Digital for Income Tax (MTD IT) quarterly reporting and basis period reform are the biggest changes to administration of income tax in over 25 years. What does this mean for advisers and their clients?

This guidance note looks at some key choices, challenges and opportunities as the start date approaches:

1. •

   there’s a problem with accounting dates: if, when and how they should change?

2. •

   workflow in the move to quarterly reporting and basis period reform needs careful managing

3. •

   if one’s in, it’s all in: check clients with multiple income streams

Sole traders with turnover above £50,000 will need to follow the rules for Making Tax Digital for income tax (MTD IT) from 6 April 2026. Those with turnover over £30,000 will join from 6 April 2027. There will be further consultation before the regime is extend to gross income of £30,000 or less. Where a sole trader also has property income, combined gross rental income and trading turnover must be considered.

At Autumn Budget 2024,