In this week’s Enews, there is a warning for sole traders and landlords who will be affected by the next stage of Making Tax Digital. We also look at calls to reform the apprenticeship system and there is a reminder for those eligible to claim their Child Trust Funds to update you on.
Sole traders and landlords given MTD warning
Sole traders and landlords have been warned they need to act now to be ready for Making Tax Digital (MTD) for Income Tax.
HMRC is reminding those earning more than £50,000 from self-employment and property of major changes from 6 April 2026. They will need to use recognised software to keep digital records and send light-touch quarterly updates of their income and expenses.
The tax authority says these are not extra tax returns.
Free software options are available and once income and expenses are recorded, the software generates a simple summary to send to HMRC.
HMRC says that at the end of a tax year, those within MTD for Income Tax will still need to file a tax return by the following 31 January. However, the software will already hold the information from the quarterly updates, meaning no last-minute hunt for records or receipts.
Craig Ogilvie, HMRC’s Director of Making Tax Digital, said:
‘With two months to go until MTD for Income Tax launches, now is the time to act. A range of software is available and the system is straightforward and helps reduce errors. Thousands of volunteers have already used it successfully.
‘This will make it easier for sole traders and landlords to stay on top of their tax affairs and help ensure everyone pays the right amount of tax.
‘Spreading your tax admin throughout the year means avoiding that last minute scramble to complete a tax return every January. Go to GOV.UK and start preparing today.’
Internet link: HMRC press release
Apprenticeship system reform must go further
The government must reform the apprenticeship system to make it fit for the 21st Century, according to a new report published by the British Chambers of Commerce (BCC).
The report says that the current framework is too rigid, lacks clarity, neglects higher-level skills and is failing to meet the needs of business.
The report found that while 67% of firms were facing skills shortages, more than half of them do not feel that current training options are plugging this gap.
It also identifies that over a third of businesses say lowering the threshold for the National Living Wage from 21 to 18 will make them less likely to recruit younger people.
Kate Shoesmith, Director of Policy and Insights at the BCC, said:
‘There can be no doubt how truly transformational this training system is. Becoming an apprentice provides a direct route for young people into work, to earn and learn, while setting out a clear pathway for their future development.
‘For established employees they offer the opportunity to upskill, while remaining productive in their current role, a key reason that they remain attractive to employers.
‘But it has been clear for a while that the system has many flaws. Take up and completion rates have been falling, and some businesses have turned their backs on it.
‘The government has recognised it needs to stop this rot and shake things up. But its proposed reforms do not go far enough and lack clarity.’
Internet link: BCC website
HMRC urges young people to claim Child Trust Funds
HMRC is urging young people who have yet to claim their Child Trust Fund (CTF) to do so during National Apprenticeship Week.
HMRC’s figures show 758,000 young people could be missing out on cash as they have yet to claim the savings in their CTF account.
CTF are long term, tax-free savings accounts which were set up for children born between 1 September 2002 and 2 January 2011 with an initial government deposit of at least £250.
Young people can take control of their account at 16, but once they turn 18 years old the account matures and they can decide whether they want to withdraw the money or re-invest it.
With hundreds of thousands of apprentices under the age of 24 across the UK a CTF worth on average £2,242 each, will give them a financial head start.
Myrtle Lloyd, HMRC’s Chief Customer Officer said:
‘Whether young people are on an apprenticeship, starting their first job, or making plans to go to university, a CTF can make all the difference. Find yours today by searching ‘find my Child Trust Fund’ on GOV.UK.’
Internet link: HMRC press release
