Are you prepared for HMRC’s Making Tax Digital system? Plus, Cyber Governance and How Rejection Can Fuel Business Success
As we start the week we remind relevant sole traders and landlords to ensure they are ready to submit quarterly updates to HMRC as part of their Making Tax Digital initiative. We also reassure budding business owners that even the most successful entrepreneurs faced rejection when they first started out – don’t give up at the first hurdle!
MTD for Income Tax: Less Than a Year to Go
If you’re a sole trader or landlord with annual income over £50,000, a major change is coming your way. From 6 April 2026, you may be required to keep digital business records and submit quarterly updates to HM Revenue and Customs (HMRC) under Making Tax Digital (MTD) for Income Tax.
This is one of the biggest shifts in Self Assessment since it was introduced, and while there are potential benefits, it will also mean significant changes in how you manage your accounts.
What’s Changing?
Under MTD for Income Tax, affected individuals must:
- Keep digital records using MTD-compatible software.
- Submit quarterly updates of income and expenses to HMRC.
- File an end-of-year digital tax return (replacing the annual Self Assessment tax return).
The qualifying income threshold refers to total income from self-employment and property (before any expenses or allowances are deducted).
MTD aims to move the tax system towards more frequent, digital reporting. While some businesses may find it helps with financial organisation and reduces errors, it also means a shift away from the once-a-year tax return process that many are familiar with.
The Pros and Cons
You may find some potential benefits from the new system, such as:
- More up-to-date information about your tax position.
- Possible time savings at year-end if records are kept properly throughout the year.
- Reduced risk of errors in tax reporting.
However, there are going to be some potential challenges too:
- Additional administrative burden, with four quarterly update submissions plus an end-of-year tax return.
- Requirement to purchase or subscribe to compatible accounting software, if you don’t do so already.
- A learning curve for those less familiar with digital bookkeeping.
For many sole traders and landlords, the biggest adjustment will be the need for regular digital record-keeping rather than dealing with tax in one go at the end of the year.
What Happens Next?
MTD is gradually being introduced so that it will eventually be a requirement for any self-employed individual or landlord with qualifying income over £20,000.
- From April 2026, self-employed businesses and landlords with qualifying income over £50,000 will need to comply with the new MTD requirements.
- From April 2027, the threshold falls to £30,000.
- From April 2028, it drops again to £20,000.
HMRC is currently encouraging businesses to join a testing programme, which allows participants to familiarise themselves with the new system before it becomes mandatory. During testing, there will be no penalties for late quarterly updates, making it a safer time to learn the process.
How We Can Support You
Whether you want help choosing software, setting up your digital records, or simply understanding what’s changing, we’re here to guide you through the transition. Every business will be different – some may need only minor tweaks to their processes, while others may face a bigger adjustment.
If you’d like to discuss how MTD will affect you, or how best to prepare, please get in touch.
Cyber Governance: Why Boards Need to Take the Lead
For most businesses today, digital technology is fundamental to operations. With that comes the growing reality that cyber security is no longer just an IT issue – it’s a business owner and board-level responsibility.
Managing cyber risks effectively is now as essential as managing financial, legal, or operational risks. Increasingly complex supply chains and evolving threats make strong cyber governance critical not just for resilience, but for business continuity and sustainable growth.
To provide support in this area, the National Cyber Security Centre (NCSC), working alongside the Department for Science, Innovation and Technology (DSIT) and industry experts, has developed a set of resources.
While these resources have not been specifically designed for smaller businesses, the practical insights contained in the guidance can be useful to businesses of all sizes.
The resources are split as follows:
- Cyber Governance Code of Practice – sets out the most critical governance actions that directors need to take ownership of.
- Cyber Governance Training – confirms why and how board members take those actions.
- Cyber Security Toolkit for Boards – underpins the above two, providing in-depth support.
These tools are designed to be practical, with input from organisations like NEDonBoard to ensure relevance for board members.
While many businesses will already have some cyber security measures in place, these resources aim to help boards review whether governance structures are sufficiently robust – and, if necessary, strengthen them.
Good cyber governance is not just about compliance; it can also improve resilience of your business, protect your reputation, and put you in a better position for growth in a digital economy.
To review the guidance, see: https://www.ncsc.gov.uk/cyber-governance-for-boards/overview
How Rejection Can Fuel Business Success
Nobody enjoys rejection. Whether it’s a declined loan application, a missed contract, or an investor turning you down, rejection can sting – especially when you’ve poured your energy and passion into your business.
But rejection, uncomfortable as it is, can often be a powerful catalyst for success. In fact, many successful entrepreneurs credit their biggest breakthroughs to the lessons they learned when things didn’t go to plan.
Here’s why rejection could be one of the most valuable experiences for your business journey.
1. Rejection Encourages Reflection
When we experience rejection, it forces us to step back and reassess. Was my sales pitch as strong as it could have been? Is the business plan really robust? Are we speaking to the right audience?
This kind of honest reflection can uncover weaknesses we might otherwise have missed – and allow us to strengthen our business models, sharpen our strategies, and approach the next opportunity better prepared.
2. It Builds Resilience
Running a business inevitably involves setbacks. Those who succeed long-term aren’t the ones who avoid failure altogether – they’re the ones who get back up after a knock.
Each rejection you survive strengthens your resilience. It builds the kind of persistence and adaptability that’s essential for navigating the inevitable ups and downs of business life.
3. Rejection Can Point You Towards Better Opportunities
Sometimes a ‘no’ clears the way for a much better ‘yes.’ A declined funding offer might push you to seek out a partner who’s a better fit. A lost customer could free up time to focus on higher-value work.
While it’s natural to feel disappointed initially, rejection can actually redirect your efforts toward opportunities that are more aligned with your goals, values, and long-term success.
4. It Teaches You How to Handle Criticism
Rejection often comes with feedback – not always well-delivered, but valuable nonetheless. Learning to separate personal feelings from constructive criticism is a vital skill for any business owner.
If you can view feedback objectively, you can use it to make real improvements. Over time, you’ll build not only a stronger business but also stronger relationships with clients, investors, and collaborators.
5. Every Successful Entrepreneur Has Faced Rejection
It’s easy to look at successful businesses and assume they had a smooth journey – but behind almost every success story is a long list of rejections.
- J.K. Rowling faced multiple rejections before Harry Potter was published.
- James Dyson built more than 5,000 prototypes before perfecting his vacuum cleaner.
- Airbnb was rejected by investors several times before becoming a global brand.
Persistence in the face of rejection isn’t a sign of foolishness; it’s often a necessary part of the process.
Final Thoughts
Rejection is painful, but it’s also a sign that you’re pushing boundaries, taking risks, and putting yourself out there – all of which are essential for business growth.
If you can use each setback as a learning opportunity rather than a stopping point, rejection can become one of the most powerful tools in your entrepreneurial toolkit.
If you’d like to chat about how to build financial resilience into your business planning – or simply want some guidance for navigating the ups and downs of business life – we’re always here to help.