Quarter Two: News you can use
Welcome to your Q2 round‑up. The past few months have brought a wave of updates from HMRC, Companies House, and the digital tools many small businesses rely on. Here’s everything you need to know to stay compliant, organised, and ahead of the curve.
Making Tax Digital: The countdown has begun
We’re now less than a year away from the first phase of Making Tax Digital for Income Tax Self Assessment (MTD ITSA) going live in April 2026. HMRC has released several clarifications this quarter:
MTD applies to sole traders and landlords earning £50,000+ from April 2026
Threshold drops to £30,000 in 2027
Quarterly updates must be submitted via approved software
Businesses earning under £90,000 can submit consolidated expenses
Those earning above must use HMRC’s updated categorised expense list
More users are being onboarded into the MTD ITSA private beta
What this means for you: Quarterly reporting will require more frequent bookkeeping and reliable digital tools. If you’re not already using compliant software, now is the time to switch.
HMRC Penalties: Points-based system now active
HMRC’s new penalty system is now in effect for MTD ITSA.
Each missed quarterly update = 1 penalty point
4 points = £200 fine
Points only expire after a period of full compliance
Full enforcement begins in 2027/28, but tracking has already started
Why this matters: With five submissions per year under MTD, it’s easier than ever to fall behind. Staying organised will save you money.
Companies House: New rules in force
April saw several changes under the Economic Crime and Corporate Transparency Act, including:
Mandatory ID verification for directors and PSCs
More detailed small company accounts
Increased filing fees
Enhanced scrutiny of company information
If you run a limited company: Expect more checks, more documentation, and stricter deadlines.
Xero & Dext: Updates to support MTD
Xero continues to expand its MTD ITSA features, including:
Improved quarterly update workflows
Better support for multiple income streams
Enhanced automation and reconciliation tools
Wider access to the MTD beta programme
Xero has also announced upcoming UK subscription price changes effective 1 September 2026:
Ignite → £18 per month
Grow → £39 per month
Comprehensive → £55 per month
Ultimate → £70 per month
These changes reflect Xero’s ongoing investment in a faster, smarter platform. Pricing is in GBP, excludes VAT, and may change with notice under Xero’s terms.
Dext has rolled out updates to help businesses prepare:
Stronger digital record‑keeping
Improved receipt capture accuracy
Better categorisation tools for MTD
Updated readiness checklists for clients and accountants
Takeaway: If you’re using Xero or Dext, you’re already ahead, but make sure your setup is MTD ready. If you need a hand, or have any questions, please get in touch!
Landlords & Side‑Hustlers: Don’t miss this
MTD ITSA applies to:
Landlords
Airbnb/holiday let hosts
Sole traders
Side‑business owners
Anyone earning £50,000+ in combined income
Many in this group still don’t realise they’ll need to submit quarterly digital updates. If that’s you, now is the time to prepare.
Your Q2 Action List
To stay compliant and avoid penalties:
Move to MTD‑compatible software (Xero, Dext, etc.)
Start keeping digital records now
Check whether you qualify for consolidated or categorised expenses
Set reminders for quarterly deadlines
Review your Companies House obligations
Speak to your accountant about preparing for five submissions per year
At DS Business Support, we’re here to make all of these changes feel manageable. We take care of the digital bookkeeping setup, ensure your records are fully MTD‑ready, and handle quarterly submissions so you never have to worry about missing a deadline. If you’re using tools like Xero or Dext, we’ll make sure everything is connected properly and that you feel confident using them day to day.
For limited companies, we stay on top of the new Companies House requirements, from ID verification to updated filing rules, so your business remains compliant without the stress. And whether you’re a landlord, a sole trader, or juggling multiple income streams, we help you understand exactly how the new rules apply to you and keep everything organised. Above all, we communicate clearly and proactively, giving you practical guidance and peace of mind.