Introducing EY TaxChat™

Making Tax Digital (MTD) is a new HMRC regime that means certain taxpayers will need to use a different system to report their income and gains for a tax year. It applies to many sole traders and landlords and those impacted will make submission through this new system rather than file a tax return via Self Assessment. 

The transition from Self Assessment to MTD depends on your qualifying income, this is the gross turnover from all rental properties and self-employment. If your qualifying income exceeds £50,000 based on your 2024/25 tax return you will be in MTD from 6 April 2026. The thresholds will reduce over future tax years bringing more taxpayers into MTD over time.

Taxpayers who meet the requirements must make in-year quarterly submissions of their self-employment and rental income and expenses. The standard quarter ends are 5 July, 5 October, 5 January and 5 April. The quarterly submissions must be made by the 7th of the following month, i.e. 7  August, 7 November, 7 February and 7 May. 

A final submission is made following the end of the tax year to include the finalised figures for the self-employment and rental income as well as all other sources of income and gains. This is very similar to the current Self Assessment tax return and the submission deadline is the same as under Self Assessment.

If you receive significant savings and investment income e.g., interest and/or dividends, then HMRC may require you to complete a tax return.

EY tax professionals will work with you to keep an accurate record of your investments and accurately report to HMRC any income from your investments on your tax return.

EY tax professionals will claim all available tax reliefs and allowances appropriate for your circumstances, including:

• Personal savings allowance
• Tax-free starting rate for savings

If you have disposed of any chargeable assets, EY tax professionals will calculate the capital gain (or loss) arising on the disposal of assets and report it to HMRC on your tax return.

Some common examples of chargeable assets are:

• Stocks and shares
• Land and property
• Antiques, paintings, jewellery

EY tax professionals will also claim all available tax reliefs and allowances appropriate for your circumstances and will keep an ongoing record of any capital losses available to carry forward.

If you are a settlor or beneficiary of a trust, EY tax professionals will report any taxable trust income and claim the appropriate credit for any tax paid.

EY has a specialist trust team who can support you with preparing trust tax returns and advise on any trust-related tax matters.

You may be entitled to claim a tax refund from HMRC if you have made tax-efficient investments during the year, for example:

• Enterprise Investment Scheme (EIS)
• Seed Enterprise Investment Scheme (SEIS)
• Venture Capital Trusts (VCTs)

EY tax professionals will claim all available tax reliefs and allowances appropriate for your circumstances, for example:

• Income tax relief
• Capital gains tax deferral relief
• Capital gains tax reinvestment relief

EY tax professionals will claim all available tax reliefs and allowances appropriate for your circumstances, including:

• Business mileage
• Professional subscriptions
• Higher-rate tax relief qualifying pension contributions
• Gift Aid relief 
• If you are impacted by the high-income child benefit charge or the pensions annual allowance charge, EY teams will work with you to identify any amounts due to HMRC

If you receive income from abroad, this should be reported to HMRC on a tax return. 

EY tax professionals will report this income on the foreign pages on your tax return and work with you to claim all available tax reliefs and allowances appropriate for your circumstances, including:

• Double taxation relief
• Foreign tax credits 
• Overseas workday relief
• FIG (Foreign Income and Gains) relief for qualifying new residents in the UK