TAX
TALK...TAX TALK...TAX TALK 3. Potential costs
There may be software costs and extra accountant fees to help with the transition and ongoing sub- missions - but if managed properly, the benefits in accuracy and planning often outweigh the cost.
How to prepare: a practical checklist Here’s a preparation plan for PH drivers and operators: Get clear on thresholds
Work out whether your combined income from self- employment and (if relevant) property income will place you above the threshold for 2026. If your income is close to the £50,000 mark, prepare now.
Choose digital accounting software
Select MTD-compatible software that fits your business needs - ideally one that connects to your bank account and pre-sorts your transactions. Such as” l Xero l QuickBooks
l FreeAgent l Other certified MTD tools
If you’re unsure which is right for you, your accountant should help you choose and set it up.
Get it done Even if it’s not yet compulsory for you, start entering your income/expenses digitally. Early adoption gives you time to learn the system before deadlines bite. So:
Set a regular review schedule
Consider daily, weekly or fortnightly entry of receipts/ invoices to spreads the workload and reduce mistakes. Understand what expenses you can claim
Talk to your accountant. Make sure you know which business expenses are allowable and how to record them within your software. Vehicle expenses are often a key part of private hire tax relief, so recording them properly throughout the year is essential.
Work with your accountant
Accountants provide value far beyond filing tax returns. Many practices are already helping clients prepare and maintain digital records and will ensure your quarterly submissions are accurate and timely.
Final thoughts
Quarterly digital reporting and mandatory software might seem daunting but by modernising your record- keeping, you reduce year-end stress, and stay compliant with HMRC’s evolving requirements.
If you’re unsure where to begin, the safest first step is to speak with an accountant who understands MTD and can help tailor a plan that fits your business.
This change isn’t just about compliance - it’s about taking control of your business.
PHTM FEBRUARY 2026
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