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Dec 202505

Are you ready for Making Tax Digital in April 2026?

budget, general business, self assessment, tax planning
Making Tax Digital for Income Tax is one of the most significant changes to the UK tax system in decades and it becomes mandatory from April 2026 for anyone earning over £50,000 from self-employment and property income. 

This new system will replace the traditional once a year Self-Assessment with a fully digital approach to record keeping and reporting. Instead of a single annual return, affected taxpayers will need to submit quarterly updates and in some cases two sets of quarterly updates if they have both business and property income, along with a final end of year submission. 

With HMRC tightening compliance checks, increasing documentation requirements, and placing much more emphasis on accurate digital records, now is the time to understand what’s changing and prepare your systems before the deadlines arrive.

What does this mean for sole traders and landlords


From 6 April 2026, MTD for Income Tax becomes mandatory for individuals whose gross income exceeds £50,000 (in the 2024/25 tax year).

If your total gross income passes £30,000 in 2025/26, expect the requirement to apply from April 2027 and a further drop to £20,000 is stated for April 2028, meaning most people will eventually fall under Making Tax Digital.

You must keep digital records of income and expenses. For each business, whether self-employment or rental, you will need to send a quarterly update. At the end of the tax year, a final, full digital tax return must be submitted taking into account all income sources.

Here’s how that works depending on your situation:
  • If you’re a sole trader only: 4 quarterly updates + 1 final return = 5 submissions per year.
  • If you have property only: 4 quarterly property income updates + 1 final return = 5 submissions per year.
  • If you both trade AND rent out property: 2 separate sets of quarterly updates (one for business income, one for property) + the final combined return = 9 submissions per year.

Why are HMRC doing this?


The push behind MTD is for greater data, greater transparency, and fewer surprises for both taxpayers and HM Revenue & Customs.

Many sole traders and landlords are still unprepared. One recent survey showed that a significant number remain unaware of the upcoming changes, still rely on spreadsheets or paper, and underestimate the time required for digital record keeping.

HMRC will now expect full digital records, including income and expenses tracked through compatible software, casual bookkeeping (bank statements and spreadsheets) won’t be enough.

How can we help? We are fully MTD ready


As your accountant of choice, we’ve already taken steps to implement MTD compliant processes and software. 
  • We’ll set up software to manage your income and expenses digitally.
  • Keep separate records for self-employment and property.
  • Submit quarterly updates on your behalf.
  • Handle the final year end return and adjustments, including other income types like PAYE, dividends, interest and capital gains etc.

It is a lot, but it also means no more scrambling at year end time and no surprise HMRC investigations and peace of mind that everything is done properly first time.

Act now – April 2026 isn’t far away


It may seem like plenty of time but once you think about the first quarter (April to June 2026), the first deadline (07 August 2026) and all the bookkeeping, it comes around fast. Getting organised now helps you avoid last minute panic and ensures you’re fully compliant from day one.  

For those of you having to start this process in the first batch April 2026 to June 2026. We have already been in touch to let you know you are in the list. We are still very much around for you, if you need to ask any questions on what has been the biggest change sole traders have ever faced.

MTD for Income Tax will bring extra work and more regular filings. But the goal is clearer financial records, fewer tax surprises, and smoother compliance with HMRC.

With the right software, the right support and the right accountant, you can turn this change from a burden into an opportunity to get your finances in order once and for all.

Let’s get ready, April 2026 will be here before you know it.
Nov 202527

Budget 2025: Key Points

budget, general business
The release of this year’s budget comes later than usual, building even more anticipation as businesses across the country have waited eagerly to understand what it means for them. Now that it’s finally here, we can dive straight into the key points, highlighting the measures and tax changes that will have the greatest impact on businesses in the new financial year.

Minimum Wage


Minimum wage will increase from April 2026. The hourly rate for over 21s will rise by 50p to £12.71. Workers aged 18-20 will be seeing an 85p rise to £10.85. With plans for all adults to be on the same hourly rate. 

See table below for a comparison of the minimum wage.

 

21 and over

18 to 20

Under 18

Apprentice

Currently

£12.21

£10.00

£7.55

£7.55

From April 2026

£12.71

£10.85

£8.00

£8.00

Tax Thresholds


The chancellor has confirmed that both income tax thresholds and the equivalent National Insurance contributions thresholds will remain frozen for a further three years until April 2031.

That means the tax-free income threshold (our Personal Allowance) stays at £12,570. The last time the Personal Allowance was increased was prior to 2021, since then it has remained unchanged. 

If your total income in a tax year is £12,570 or less, you pay no income tax. Only the portion above that is taxed, so, someone earning £30,000 would pay income tax only on £17,430 at a rate of 20%.

Tax rate depends on your taxable income.

 

Taxable Income

Tax Rate

Personal Allowance

Up to £12,570

0%

Basic Rate

£12,571 to £50,270

20%

Higher Rate

£50,271 to £125,410

40%

Additional Rate

Over £125,410

45%

Pensions


Starting April 2029, the amount that can be paid into a pension via salary sacrifice while saving on National Insurance will be capped at £2,000. Any contributions above this limit will be treated like standard employee pension payments and will save on Income Tax and not National Insurance.

According to the OBR, removing these tax advantages from salary-sacrifice pension arrangements is expected to generate an additional £4.7bn in National Insurance revenue.

Individual Savings Accounts (ISA)


An ISA is a type of savings account where the interest you earn is completely tax-free. At the moment, you can save up to £20,000 each tax year in a cash ISA.

From April 2027, the Chancellor has announced that the annual cash ISA limit will be reduced to £12,000, the first decrease since 2017. The aim is to encourage more people to invest through stocks and shares ISAs instead.

These are the affects this will have:
  • If you’re 65 or over: Nothing changes. You can still put up to £20,000 a year into a cash ISA.
  • If you’re 64 or under: Your cash ISA allowance will drop to £12,000, but only for new contributions made from April 2027 onwards. Any savings already held in a cash ISA won’t be affected.
  • Stocks and shares ISAs: The annual limit stays at £20,000.
  • Overall ISA limit: Still £20,000 per tax year for everyone, meaning you can continue to spread your allowance across different ISA types as you wish.

Dividends, Savings Interest and Property Income


If you receive dividend income, your tax rates will increase from April 2026. This applies if you hold investments outside a stocks & shares ISA, your total income exceeds the Personal Allowance (currently £12,570) and your dividend earnings are above the annual dividend allowance (currently £500).

Dividend tax rates will rise by 2%: the basic rate will move from 8.75% to 10.75% and the higher rate from 33.75% to 35.75%. The additional rate will remain at 39.35%.

Savings interest tax rates will also rise but from April 2027. For those who do pay tax on savings interest, the basic rate will increase from 20% to 22%, the higher rate from 40% to 42%, and the additional rate from 45% to 47%.

Those earning income from property will see similar changes from April 2027. Although this income is currently taxed at the standard Income Tax rates, property income will be given its own set of rates. These will sit 2% above today’s general Income Tax rates: 22% for basic rate, 42% for higher rate, and 47% for additional rate.


The Chancellor confirmed that around 13 million pensioners will receive an above inflation rise to the state pension from April 2026. Both the new and old basic state pension will go up in line with average wage growth, currently 4.8% giving pensioners a meaningful cash increase.

If you’d like to discuss any part of the budget in more detail, please feel free to give us a call or send us a message, we’re here to help. You can read the full budget by clicking here. If you want support planning for the upcoming minimum wage increase and what it means for your business, we can guide you through the numbers so you’re fully prepared. Despite the challenges and changes ahead, keep pushing forward. With the right planning and mindset, we can all work towards a strong finish to 2025 and an even more successful 2026.

Nov 202506

Preparing for the season ahead

budget, business plan

It’s the beginning of November and we’re working our way through the many self-assessment returns we have on the desk at the moment. That board is super filling up.


It’s the season for starting to think about Christmas, the weather is changing, the leaves are golden brown and reds. Its one of our favourite times of year. The Pumpkin soup is made, the Christmas parties been booked.


We are all working through a year of uncertainty.  Seems like this has gone on for years.  We’ve moved from Brexit, the Covid pandemic, to energy crisis and the crazy interest rates. We’re not alone, big countries like France, Germany and America are going through the same. But guess what we are all still here. We’re leading our lives and running our businesses. Goals are taking a little longer and we are seeing a number of clients taking their businesses into their own hands and putting long awaited goals into practise. So, wishing them all the success with these.


The delayed budget has not helped anybody, so many rumours and you can’t tell if it’s the newspapers scaring everyone and selling papers, or if stories and tax consultation is being tested in the marketplace.


It’s hurting our retail industry and people are waiting to buy Christmas presents. Retail is not just about big corporation but about small business owners working hard to make a living for themselves, in the town centres and the local villages. So please support your local business, the local gift shop, the card shop, even the little baker on the corner. They all need you right now. 

  

Hospitality has taken a beating over the past couple of years, they employ a lot of people and need your support too. Again, please give your family run local a try, bring the festive cheer to the community. We see several of them bringing and supporting local brewers, and artisan baking is a very popular thing. They are not all dealing with large corporations for their stock, but local family run businesses, preparing quality food and drink. Supporting these businesses you are supporting a whole community.


Preparing for time off or gearing up for it to be your businesses main time of year. Try to take some time for yourself, its all too easy to work late days and full on at weekends.  


The staff maybe wanting time off too, to spend with their families. It’s definitely a juggling act. Here at Cross Accounting, we always have a team discussion about holidays and put in place a buddy system, in that they need to discuss with their holiday buddy who is taking time off when. To ensure they are not all off together at the same time and someone with the same skillset as another staff member aren’t both off together, causing delays for the client base.  


We have a very colourful holiday planner, so everyone can see at the instant look who is off and when. It’s worked well for years. It also gives me a heads up if someone isn’t using up their time off and could ask for a lot of time off in a short time period. So, I encourage my staff to take time off throughout the year. They are more rested and motivated and also healthy. Give it a try.


Back to the tax return. Please get your return into your accountant before the weather changes. Remember accountants like to socialise and party too. So, if you’d rather your accountant not sing Christmas carols in your ear, get super organised this year and don’t put off that dreaded tax return. Concentrate on enjoying the festive season and even planning that super dream goal for 2026, with all that free time you now have.


Here’s to a better end to 2025, and a dream 2026.

Jul 202524

Business Tips from an Accountants point of view

budget, business plan

There are approximately 5.6 million businesses in the UK, of which 98% are considered small to medium sized businesses. So, we small businesses are crucial to the UK economy, there is no denying this.

 

Whether you are a start-up and excited for the times ahead, or an establishment renewing your challenges, we all want to be successful with our business. In our latest blog, we talk about tips we think are vital to any business.

 

We all have a vision in mind, of where we’d like to see our business in the future. This vision needs to be translated on paper as your business plan. A business plan is a must for all business owners. This can help outside investors get an insight of your business, for if ever you need funding to grow your business.

 

Business Plan


A business plan should consist of;

·    Summary – What is your purpose, what is your vision?

·    Target market – Who are you likely to sell to

·    Competitors – What is your rivals weakness? Why are you different?

·    Staff – Do you need people to help run your business. What level of skill and pay is required?

·    Suppliers – Who will be your main supplier?

·    Marketing Plan – How will you advertise yourself to the world

·    Operations – Which is the best way to run your business.

·    Finance – How much money do you need? Determine the profitability of the business.

 

Business Structure

As well as a business plan, you will need to have a business structure. Sole trader, partnerships and limited companies all have their own pros and cons. Deciding which structure to choose is not always straightforward. If an asset is owned outright, then you would need to consider retaining personal ownership on incorporation. If you’re not sure which structure model you should go for, then here at Cross Accounting we can give tailored advice to you.

 

Year End

We cannot stress enough the importance of doing your year end as early as possible. Once completed, this will give you peace of mind as you will not have to worry, until next year. It will also give you more time to budget for your tax bill. You will not be in a rush to find the money for the tax bill and not kill your cashflow. Keep all receipts for your expenses, these will all help lower the tax bill. If you buy equipment or tools, mobile phone bills, petrol, these are all deductible. HMRC can conduct random spot checks, so it’s important to keep paperwork, recommended for 6 years.

 

Budgeting

Having budgets in place for your business can help you predict the near future. This allows you to have a spending plan, so you can make sure you have money for the things you need and the things that are important to you. You can see what is eating up your cash and avoid spending on unnecessary fees. Below is an example of a very simple budget.

 

 

Month 1 (Budget)

Month 1 (Actual)

Variance

Month 2 (Budget)

Month 2 (Actual)

Variance

Month 3 (Budget)

Month 3 (Actual)

Variance

Starting Cash

10,000

10,000

0

11,630

11,600

-30

 

 

 

Income

2,500

2,500

0

 

 

 

 

 

 

Total Income

2,600

2,600

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rent

800

800

0

 

 

 

 

 

 

Mobile

50

55

5

 

 

 

 

 

 

Travel

20

50

30

 

 

 

 

 

 

Gas and Electricity

100

95

-5

 

 

 

 

 

 

Total Expense

970

1,000

30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income - Expense

1630

1,600

-30

 

 

 

 

 

 

 

These tips will keep you motivated and more importantly give you an idea of where your finances lay, helping you to quickly identify if there are rainy days ahead.

If you need expert tailored advice, please do get in touch as we are always happy to help.

Jul 202507

Interest Rates, Credit Scores and Financial Health

budget, business plan

The Bank of England held interest rates at 4.25% but signalled that further cuts may be on the horizon. While this can present opportunities for those looking to refinance, borrow, or invest, getting the best deals is all about how prepared you are.

 

Credit Scores

Whether you’re applying for a personal loan, a business overdraft, or a mortgage, your credit score is key. A better credit profile often gives you access to lower interest rates, better terms, and higher borrowing limits.

It’s not just personal — businesses are being judged too. Especially if you’re running a small or cash-heavy business, you need to show the banks that your income is consistent and traceable. This means banking regularly. If you’re taking in cash, deposit it frequently. Banks and lenders want to see a clear money trail, and this trail heavily influences their decisions.

 

Identification

A number of people come to us facing delays simply because their names don’t match across official documents. Whether you’ve been married, divorced, or just changed your name, your passport, driving licence, utility bills, and bank statements should all align.

 

Why? Inconsistent ID records can drag down your credit score or delay financial approvals, especially when you're trying to refinance or borrow.

 

Budgeting

When it comes to credit scoring and financial health, the basics still matter. Set a budget, pay on time, and don’t miss repayments. These small, consistent habits are the biggest contributors to long-term financial strength.

 

Payback Criteria

Lenders are getting stricter. Working capital requirements have increased. Before, many banks were happy if you had 1.5 times your loan payment obligations in working capital. Now they want to see 2 times making it so much harder to obtain a loan.

For example, if your business has monthly loan and interest payments of £1,000, you now need at least £2,000 in working capital a month to be considered financially stable in their eyes.

This change is a big deal for small businesses or anyone looking to re-finance.

 

Plan Now to Take Advantage

  • Review your credit score and dispute any error
  • Align your ID documents (especially name consistency)
  • Build your working capital reserves if you’re a business owner
  • Start comparing re-mortgaging or refinancing options now
  • Speak to a financial adviser or broker who can help position you before rates change
  • Planning ahead is key

 

Being prepared isn’t just about having money, it’s about showing lenders that you manage it well. The most successful borrowers and businesses are the ones who plan ahead.

If you need help with your credit, your documentation, or just planning your next financial move, we’re here to support you every step of the way.

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