If a brown envelope from HMRC has landed on your doormat lately, you’re not alone. It’s part of their heads-up campaign about something called MTD for ITSA. Bit of a mouthful, we know – but bear with us, because it’s something you’ll want to be aware of. Let’s break it down in plain English. So, what actually is MTD for ITSA? It stands for Making Tax Digital for Income Tax Self Assessment. It’s HMRC’s way of nudging the tax system into the digital age – and yes, it’s going to affect how sole traders and landlords report their income. Here’s the gist: If you’re self-employed or earn income from property, you’ll soon need to: Keep digital records of what comes in and goes out Use software that talks nicely to HMRC (we can help with that) Send updates every quarter, instead of just once a year File a final tax return online at the end of the year The switch is being rolled out in stages, starting with: April 2026 if your total income (not profit!) from self-employment and/or property is over £50,000 April 2027 if your income is over £30,000 If your 2023–24 tax return shows you’re already near or above the £50k mark, you’ll likely get a letter from HMRC sometime in 2025 as part of their awareness campaign. If you do get a letter – don’t panic We know a brown envelope from HMRC can make your stomach drop a little. But in this case, it’s just a nudge to start thinking ahead. There’s no mad rush. You’ve got time to get everything sorted, and we’re here to help you do exactly that – without it becoming another thing on your already-too-long to-do list. We’ll help you get everything set up We’ve already helped plenty of our clients switch to MTD-friendly systems, and trust us – it doesn’t need to be complicated or stressful. We’ll walk you through what you need to do, help you choose the right software (and show you how to use it), and make sure you’re ticking all the right boxes. If you’ve had the letter and want to talk through what it means for you – or you just want to get ahead of the game – drop us a line on 01709 589 439.

On Wednesday 26 March, Chancellor Rachel Reeves delivered the Spring Statement – a response to the latest economic forecasts from the Office for Budget Responsibility (OBR), and a chance for the Government to outline where things are headed next. The full Budget is now pushed to the autumn, so this wasn’t about major tax changes. Still, it was far from a routine update. Spending cuts were on the table – particularly in the benefits system and the wider public sector. Here’s a clear and simple breakdown of what was said, and what might matter for you. A Bit of Background The Spring Statement was meant to be a check-in based on fresh numbers from the OBR. But with the economy under pressure from global trade issues and rising defence costs, it turned into something bigger. Had the Government left everything untouched from last autumn’s plans, we’d be looking at a £4.1 billion deficit by 2029/30. Instead, some careful shuffling has brought things back to a very specific £9.9 billion in “fiscal headroom”. Growth is actually looking a little better than expected – aside from a small dip in 2025. But that growth is mostly coming from public spending, not from businesses. Confidence in the private sector has taken a knock, especially after last year’s announcement about the increase in employer National Insurance. That NI rise kicks in from April this year, so it’s something to factor in if you employ staff. Labour’s Fiscal Rules Explained There are two main rules guiding Government spending: Debt should be falling as a percentage of the economy by year five of the forecast. Everyday Government spending should be covered by taxes and other income – not borrowing. At the moment, the OBR reckons there’s just a 51% chance that the debt rule will be met. So it’s all pretty finely balanced. Growth and Household Income Economic growth for 2025 has been downgraded from 2% to 1%. But looking further ahead, growth forecasts are a bit more optimistic. The OBR reckons real household income will grow faster than previously expected this year. That means the average household could be about £500 better off per year. More on That £9.9 Billion Buffer That fiscal headroom we mentioned earlier? It’s back at £9.9 billion. But only just. The Institute for Fiscal Studies has warned that if the Government wants to stay on track with its targets, tax rises are still very much on the cards. Welfare Changes Some benefits cuts had already been flagged before the Statement, but they were tweaked slightly: Incapacity benefit will be halved to £97 per week for new claimants and frozen there, saving £4.8 billion by 2029–30. Universal Credit’s standard allowance will rise from £92 to £106 per week. But the health-related element is being halved and frozen for new claims. Defence and Security Spending There’s an extra £2.2 billion for the Ministry of Defence next year. Defence spending will hit 2.36% of GDP in 2025, on its way to 2.5% by 2027. The focus is on newer technologies – drones, AI, and high-tech manufacturing. £400 million has been set aside for innovation in advanced manufacturing. Taxes: No Increases (Yet) No new tax rises were announced in this statement – but as mentioned, future increases haven’t been ruled out. HMRC will be hiring 600 new staff to crack down on tax evasion, with a goal of recovering £1 billion by 2029. Public Spending and the Civil Service Department spending is growing at 1.2% above inflation each year (just slightly down from 1.3%). There’s also a drive to cut Civil Service admin costs by 15% by 2030. That means fewer staff and more automation – expect more bots and AI doing what used to be human jobs. What Next? The headline figure of £9.9 billion is clearly doing a lot of heavy lifting in Government plans. But the margin is thin, and we’re likely to see more uncertainty in the months ahead – especially when departmental spending reviews land in June. The Autumn Budget will bring the bigger picture into view. Need a Hand Planning Ahead? If your business is feeling the squeeze – or you just want to make sure you’re prepared – we’re here to talk. We can help you understand what this all means for your business, look at ways to manage your costs, and keep your cash flow steady. Phone our office on 01709 589 439 or book a free call with us .