This month, I’m looking at a few topics that come up often in client chats: Making Tax Digital (MTD for Income Tax for self-employed and landlords), the ins and outs of the £50 gift rule (aka trivial benefits), some company benefit tips for limited companies, and a few quick-fire tips to keep your online bookkeeping on track.
- MTD for Income Tax for Self-Employed and Landlords: What’s the Deal?
You might have heard that MTD (Making Tax Digital) is already here for VAT, but what about Income Tax? MTD for Income Tax will affect sole traders and landlords with income over £50,000 from April 2026. Those earning between £30,000 and £50,000 will join the scheme from April 2027.
The rules require you to:
- Keep digital records
- Use MTD-compatible software
- Send quarterly updates to HMRC instead of a single yearly tax return
What you can do now:
- Check your income levels to see when you’ll be affected
- Start using digital software like Xero, QuickBooks, or FreeAgent
- Get used to updating your books monthly so quarterly submissions feel natural
If you have multiple sources of income (e.g., rental and self-employed), MTD could apply to both streams, so it’s worth preparing.
- Trivial Benefits: The £50 Rule (and How Not to Fall Foul of It)
Want to treat yourself (or your employees) to a small token of appreciation without a tax headache? Enter the trivial benefit rule.
Here’s how it works:
- The gift must cost £50 or less
- It can’t be cash or a cash voucher
- It can’t be a reward for work or performance
- It mustn’t be part of a salary sacrifice arrangement
Examples that work: A M&S gift card, a bottle of bubbly, a nice box of chocolates – as long as it’s not cash or something that can be swapped for cash.
If you’re a director of a limited company, you can receive up to £300 of trivial benefits per tax year, split across several occasions. This is per director, not per company.
- More Great Limited Company Benefits to Use
Running a limited company gives you access to a few handy perks, provided you follow the rules:
- Mobile phone contracts in the company’s name can be a tax-deductible expense (and not a benefit in kind)
- Employer pension contributions are corporation tax-deductible and don’t count as personal income
- Annual staff parties: Up to £150 per head per year (including VAT and all costs), as long as it’s open to all staff
- Mileage allowance: 45p per mile for the first 10,000 business miles in a tax year, 25p after that
- Working from home allowance: A small flat rate or actual cost basis if you use your home as an office
- Quick Online Bookkeeping Tips
A few small habits can make a big difference:
- Set aside 30 mins weekly to check your books. It’s less overwhelming than a quarterly panic.
- Use bank feeds in your accounting software so transactions sync automatically.
- Tag receipts on the go with your app, especially petrol, travel, or meals.
- Back up your data regularly if you’re not using a cloud-based system.
Final Thoughts
Staying ahead with your bookkeeping, understanding MTD timelines, and using limited company benefits wisely can save you both time and money. If you’re unsure which benefits apply to your situation or want help with MTD-compatible software, I’m just a call away.
Need a hand or have questions?
Book a quick chat with us or drop me an email.
Until next time,