The first quarter of Making Tax Digital (MTD) for Income Tax is now behind us  and what a smooth start it has been! At Red Tulips we have just completed our initial MTD quarter using 123 Sheets and Excel, with our clients sending their information each month. We know, however, that many sole traders, landlords and small‑business owners who are trying to manage MTD on their own are finding the transition a bit challenging. That is totally understandable, moving from an
When you start earning income from a new self-employment if you are already reporting under MTD what do you do ? You only need to add income you earn as a sole trader. You do not need to add partnership income, income from a limited company or employment income, but you will still need to include those in your tax return if you have them. You do not need to start keeping digital records or sending quarterly updates for a
If you are a self-employed counsellor, psychotherapist, or mental health practitioner in the UK, managing your tax responsibilities doesn’t have to be overwhelming. With the right knowledge, you can stay compliant, reduce your tax bill, and focus on your clients. This guide covers the essentials you need to know about UK tax for self-employed therapists including key deadlines, allowances, and what is changing with Making Tax Digital (MTD). 1. Do You Need to Register as Self-Employed? Yes — if your
Penalties for not keeping digital records The penalty for a failure to keep or preserve adequate digital records under MTD can be up to £3,000. This is not a theoretical threat; it is a real penalty that HMRC has the authority to impose. For a Single Failure: HMRC can charge a fixed penalty of up to £3,000 for each distinct failure to keep or preserve the required digital records. For Ongoing Failures: If a business continues to fail to keep
It is essential to keep onto top of your bookkeeping for Making Tax Digital (MTD) as if quarterly filings for Income Tax are late then penalties will accrue This is how the MTD penalty points system works Missing a deadline: Each time you submit a return late, you get one penalty point Your penalty threshold depends on how often you submit returns: Annual submissions: 2 points = £200 penalty Quarterly submissions: 4 points = £200 penalty Once you reach a threshold, you’ll pay
