Making Tax Digital (MTD): What It Means for VAT, Non-VAT Clients, and Your Income Reporting in 2025 and Beyond

Feeling overwhelmed by the new tax rules? You’re not alone.
Making Tax Digital (MTD) is transforming how individuals, landlords, and businesses manage their tax reporting — and whether you’re VAT-registered or not, it’s something you need to understand right now.

Let’s break it down simply together — so you know what’s happening, how it affects you, and how to stay compliant while saving time and money.

What is Making Tax Digital (MTD)?

Making Tax Digital (MTD) is HMRC’s move to modernise the tax system.
It means you must keep digital records and submit your tax returns electronically using HMRC-approved software.
No more paper returns, no more manual entries into the HMRC website. Everything is becoming digital — and mandatory.

Who Does MTD Affect?

You’ll be impacted if you are:

A VAT-registered business (even voluntary VAT)
A self-employed person (sole trader)
A landlord earning rental income
Eventually, a company liable for Corporation Tax (future phase)

In short:
Whether you’re small, growing, VAT-registered or non-VAT registered, MTD will affect you.

MTD for VAT Clients: What You Must Know

If you are VAT-registered (regardless of turnover):

You must keep digital VAT records
You must submit VAT Returns through MTD-compatible software (like Xero, QuickBooks, Sage)

Since April 2022, ALL VAT-registered businesses must follow MTD rules, even if their turnover is below the VAT threshold (£90,000 as of 2024/25).

Still using manual spreadsheets? It’s time to upgrade — penalties for non-compliance have already started.

MTD for Non-VAT Clients: What’s Coming?

MTD for Income Tax Self Assessment (MTD for ITSA) starts in April 2026 for:

Self-employed people and landlords earning over £50,000 per year.

Those earning between £30,000 and £50,000 will join MTD a year later, from April 2027.

If your income is under £30,000 — you’re safe for now. But HMRC is planning to bring everyone into MTD eventually.

What Kind of Income Must Be Declared Under MTD?

For VAT-Registered Clients (MTD for VAT):

You must digitally record and report:

All sales (standard, reduced, zero-rated, exempt)
All business-related purchases and expenses
VAT charged and VAT paid
Any VAT adjustments (bad debt, partial exemptions)

For Self-Employed and Landlords (MTD for Income Tax):

You must digitally record and quarterly report:

Business income (sales, services, freelance work)
Rental income from property
Business expenses (office supplies, advertising, travel)
Property expenses (repairs, insurance, letting agent fees)

Note:
Other personal income like employment salary, pensions, savings interest, or dividends will still be reported annually, outside of quarterly updates.

How Will MTD Impact You?

More frequent reporting — Quarterly updates plus year-end submission.

Better financial visibility — Regular updates help you spot cash flow problems earlier.

Tighter record-keeping — You’ll need to stay on top of receipts, invoices, and bookkeeping.

New software costs — You’ll need MTD-compliant software, but it often improves efficiency.

Potential penalties — If you miss submissions, HMRC’s new points-based penalty system could hit you with fines.

What Should You Do Next?

✔️ Switch to MTD-Compliant Software
If you’re still using spreadsheets or manual systems, now is the time to upgrade.
Look into Xero, QuickBooks, Sage, or FreeAgent — all HMRC-recognised.

✔️ Get Professional Support
Navigating MTD can be tricky, especially if you have multiple income streams (like self-employment and rental).
An accountant can ensure you stay compliant and find hidden tax-saving opportunities.

✔️ Keep Digital Records from Now
Even if MTD isn’t mandatory for you yet, start keeping digital records. It’ll make the transition much easier.

Conclusion: MTD Is the Future — Are You Ready?

Making Tax Digital is no longer optional.
Whether you’re a self-employed freelancer, landlord, or business owner, preparing early is the smartest move.
By staying ahead, you’ll avoid penalties, stay organised, and maybe even save tax by improving your record-keeping.

At SV&Co, we help individuals and businesses transition smoothly to MTD compliance.
Whether you need advice on the right software, quarterly submission help, or full bookkeeping support — we’re here to make it simple.

Being self-employed in the UK brings flexibility and opportunity, but it also means taking responsibility for your own taxes. Many self-employed people unknowingly make mistakes when claiming expenses, costing them valuable tax savings. In this blog, we explain the most common errors and how you can claim correctly to maximise your tax efficiency.

Common Mistakes Self-Employed Workers Make When Claiming Expenses

1. Missing Out on Allowable Expenses
Many self-employed individuals fail to claim all eligible expenses. If it’s a cost incurred “wholly and exclusively” for business purposes, you can claim it.

Examples often missed include:

Business mileage
Home office expenses
Professional memberships
Mobile phone bills used for business

2. Claiming Personal Expenses
Claiming personal or mixed-use expenses without proper adjustment can lead to HMRC penalties.
Tip: Always separate personal and business costs. If an item is used partly for business (like your phone), only claim the business percentage.

3. Poor Record-Keeping
Not keeping accurate receipts and records leads to errors and missed claims. HMRC expects detailed evidence of your expenses for at least 5 years after the 31 January submission deadline.

4. Not Using Simplified Expenses
Self-employed people can use Simplified Expenses for costs like vehicle use and working from home. These flat rates often save time and reduce errors compared to working out actual costs.

5. Forgetting About Capital Allowances
When you buy large items like computers, machinery, or equipment for business use, you can claim capital allowances and reduce your tax bill. Many forget to claim the full Annual Investment Allowance (AIA).

6. Ignoring Professional Advice
Trying to manage your own tax affairs without understanding all the rules can mean missing legitimate claims. Working with an accountant can ensure you maximise deductions legally and efficiently.

How to Save More Tax as a Self-Employed Person

Claim All Eligible Expenses
Review your spending carefully and claim everything you’re entitled to — from software subscriptions to travel costs.

Use a Business Bank Account
Separating your business and personal finances makes record-keeping easier and ensures you don’t miss deductible expenses.

Keep Accurate Records
Use bookkeeping apps or cloud accounting software to track every business-related expense in real-time.

Take Advantage of Simplified Expenses
If you work from home or use your car for business, using HMRC’s simplified rates could save you both time and tax.

Invest in Your Business
Buying necessary equipment before your accounting year-end can bring tax savings sooner through capital allowances.

Work with a Professional Accountant
An expert accountant can find additional claims, correct mistakes, and help you save far more than their fee in tax over time.

Conclusion

Self-employment offers fantastic opportunities, but simple mistakes in expense claims can cost you thousands. Understanding what you can and cannot claim, keeping good records, and getting professional advice will help you save more tax and keep your business financially healthy.

SV&Co are specialists in helping self-employed individuals claim correctly and pay only what they need to.
Contact us today for a free consultation and discover how much you could be saving.

Accessing funding has always been a challenge for early-stage businesses. In 2025 and beyond, the Seed Enterprise Investment Scheme (SEIS) has become even more critical for startups looking to secure investment, grow, and succeed in an increasingly competitive economy..

What is the SEIS Scheme?

The Seed Enterprise Investment Scheme (SEIS) was introduced by the UK government to encourage investment in young companies by offering attractive tax benefits to investors. Startups can raise up to £250,000 in early-stage funding, while investors receive valuable tax reliefs, making SEIS one of the most powerful funding tools available.

Why SEIS is More Important Than Ever in 2025

1. Increased Funding Limits
Since April 2023, the SEIS funding limit was raised to £250,000 (previously £150,000). This means startups now have access to more capital at their crucial growth stage.

2. Higher Investor Allowances
The annual investor limit has increased to £200,000. More investors can now contribute larger amounts, improving the chances of raising full funding rounds quickly.

3. Economic Uncertainty Drives Smart Investment
In a time of economic shifts and rising inflation, investors are seeking opportunities that offer strong tax advantages. SEIS provides 50% income tax relief, capital gains tax exemptions, and loss relief, making it a highly attractive investment option in 2025 and beyond.

4. Government Focus on Innovation
The UK government is promoting innovation-led growth. Tech, green energy, fintech, and healthcare startups particularly benefit from SEIS, making it a vital tool for new companies aligned with future sectors.

5. Competitive Edge for Startups
Having SEIS Advance Assurance signals to investors that your startup is compliant, trustworthy, and investment-ready. This gives startups a real edge over competitors who aren’t SEIS-approved.

Key Tax Benefits for Investors

50% Income Tax Relief on investments up to £200,000
No Capital Gains Tax on SEIS shares after three years
Loss Relief if the investment fails
Inheritance Tax Relief after two years

How Startups Can Use SEIS to Grow

Secure crucial early-stage capital
Build investor confidence
Fuel product development, marketing, and scaling
Attract long-term backers with tax incentives

Conclusion

In 2025 and the coming years, SEIS is not just an advantage—it is a necessity for serious startups. With bigger funding limits, better tax breaks, and a market hungry for innovative investment opportunities, startups that leverage SEIS will be far better positioned for success.

If you are launching a business or planning to raise funding, securing SEIS Advance Assurance should be one of your first steps.

SV&Co specialises in helping startups successfully apply for SEIS and prepare for funding rounds. Contact us today to get started.

you are starting or growing a business in the UK, choosing the right business structure is essential. One of the most common decisions new business owners face is whether to operate as a limited company or remain self-employed. This guide explores the limited company vs self-employed UK 2025 comparison, focusing on tax efficiency, legal protection, cost implications, and long-term benefits.

What is the Difference Between a Limited Company and Being Self-Employed?

Self-Employed (Sole Trader):
A self-employed person runs the business as an individual. You and your business are legally the same entity. You are responsible for all debts and liabilities, and your income is taxed through the Self Assessment system.

Limited Company:
A limited company is a separate legal entity. It is responsible for its own debts, pays Corporation Tax on profits, and allows owners (shareholders) and directors to extract income through salary and dividends.

This distinction is key when comparing limited company vs self-employed UK 2025 from a tax and risk perspective.

Tax Comparison: Limited Company vs Self-Employed UK 2025

Business Type	Tax Type	Rate (2025)
Self-Employed	Income Tax	20%, 40%, 45%
	National Insurance (Class 2 & 4)	Up to 9%
Limited Company	Corporation Tax	19% to 25% (based on profits)
	Income Tax on Salary	According to PAYE thresholds
	Dividend Tax	8.75%, 33.75%, 39.35%

By incorporating, many business owners benefit from lower Corporation Tax and more flexibility in how profits are distributed, making the limited company option more tax efficient beyond certain income thresholds.

Pros and Cons of Being Self-Employed

Advantages:

Simple and inexpensive to set up
Less administrative burden
Full control over business decisions and income

Disadvantages:

Higher tax rates on growing profits
Unlimited personal liability
May lack credibility with lenders and suppliers

Pros and Cons of Operating as a Limited Company

Advantages:

Tax-efficient profit extraction through dividends
Limited liability protection for directors and shareholders
More professional image for business clients
Greater access to tax planning strategies and allowable expenses
Possibility of income splitting with a spouse

Disadvantages:

More complex accounting and filing responsibilities
Increased costs for compliance and accountancy support
Directors have legal obligations

When Should You Choose a Limited Company Over Being Self-Employed?

For many people, the switch from self-employed to limited company becomes beneficial when:

Annual profits exceed £30,000 to £40,000
You want to build business credit and a professional image
You plan to reinvest profits or grow your business
You need personal liability protection
You want to benefit from tax planning and pension contributions

These factors make the limited company vs self-employed UK 2025 decision especially important for growing businesses.

Tax Saving Tips for Limited Companies in the UK

Take a low director’s salary (within personal allowance)
Draw additional income as dividends to save on National Insurance
Claim all business expenses including home office, travel, and subscriptions
Make pension contributions directly from the company
Hire family members if they contribute to the business
Retain profits within the company to defer personal tax

What About VAT?

If your annual taxable turnover exceeds £90,000, VAT registration is compulsory. Both self-employed individuals and limited companies can register voluntarily. Being VAT-registered may improve cash flow and increase business credibility, especially in B2B sectors.

Conclusion

There is no universal answer to the limited company vs self-employed UK 2025 question—it depends on your income level, business goals, and personal preferences. For smaller businesses, self-employment might offer simplicity and lower costs. However, as profits grow, the tax savings and legal protections offered by a limited company often outweigh the extra admin.

Before deciding, speak to a qualified accountant to ensure your chosen structure aligns with your business objectives and minimises your tax burden.

Choosing between being employed or self-employed can significantly impact your tax position, income, and financial planning. This guide breaks down the key differences, tax efficiency, and the pros and cons of each option to help you make an informed decision.

Understanding Employment in the UK

Being employed means working for an employer under a contract. Your income tax and National Insurance (NI) are automatically deducted through the PAYE (Pay As You Earn) system.

Pros of Being Employed:

Regular, predictable income
Access to employee benefits such as holiday pay, sick pay, and workplace pensions
No requirement to manage your own tax filings

Cons of Being Employed:

Limited tax relief and deductions
Higher National Insurance contributions
No control over work terms or client selection

Understanding Self-Employment in the UK

Self-employed individuals run their own businesses or work as freelancers. You are responsible for registering with HMRC and filing your own Self Assessment tax return each year.

Pros of Being Self-Employed:

Greater tax efficiency through allowable expense claims
Lower National Insurance contributions (Class 2 and 4)
Full control over your income, pricing, and business direction

Cons of Being Self-Employed:

Irregular income and lack of employment benefits
Responsibility for tax records and submissions
No statutory sick pay or employer pension contributions

Tax Efficiency Comparison

Feature	Employed	Self-Employed
Tax System	PAYE (automatic deductions)	Self Assessment (manual filing)
Expense Claims	Limited	Wide range of allowable business expenses
NI Contributions	Class 1 (higher rate)	Class 2 & 4 (lower rates)
Pension Contributions	Often employer-funded	Voluntary and self-funded
Income Flexibility	Fixed salary	Earnings based on workload and pricing

Which Option is More Tax-Efficient?

Self-employment often offers greater tax efficiency due to lower National Insurance rates and the ability to deduct legitimate business expenses. However, employment provides financial security, simplicity, and workplace benefits. The best option depends on your income level, risk tolerance, and personal circumstances.

Need Help Deciding?

At SV&Co, we advise individuals and small business owners on the most tax-efficient structure for their needs. Whether you are considering going self-employed or staying employed, we offer expert guidance tailored to your financial goals.

Contact us today for a free consultation.

If you are a self-employed subcontractor working in the UK construction sector under the Construction Industry Scheme (CIS), you may be entitled to a CIS tax refund. Many subcontractors unknowingly overpay tax throughout the year, but with the right guidance, you can legally reclaim this money from HMRC.

At SV&Co Accountancy, we specialise in helping construction workers maximise their refunds quickly and efficiently. This guide explains who is eligible, what can be claimed, and how the refund process works.

What Is the Construction Industry Scheme (CIS)?

The Construction Industry Scheme (CIS) requires contractors to deduct tax from payments made to self-employed subcontractors and submit it to HMRC on their behalf. These deductions are typically made at a flat rate of 20%, or 30% if you are not registered with CIS.

However, these deductions often do not account for your personal allowance or work-related expenses, which leads to overpayment of tax — and that’s where your CIS refund comes in.

Who Is Eligible to Claim a CIS Tax Refund?

You may be eligible to claim a CIS refund if:

You are a self-employed subcontractor registered under CIS
You have had tax deducted from your payments by contractors
You incurred allowable business expenses
You are required to submit a Self Assessment tax return

Trades commonly claiming CIS refunds include builders, carpenters, electricians, plumbers, roofers, decorators, groundworkers, and other construction-related professionals.

What Can You Claim as Allowable Business Expenses?

To maximise your refund, it is important to claim all legitimate business-related expenses. These may include:

Tools and equipment
Protective clothing and safety boots
Travel and mileage to job sites
Vehicle expenses and fuel
Public transport fares
Insurance premiums
Mobile phone (business use portion)
Office and stationery supplies
Accountant or bookkeeping fees
Courses, training, and certifications

At SV&Co Accountancy, we ensure that all your claims are compliant with HMRC regulations while maximising your refund.

How to Claim Your CIS Tax Refund: Step-by-Step Process

1. Register for Self Assessment

You must be registered with HMRC for Self Assessment and have a valid UTR (Unique Taxpayer Reference).

2. Collect All Required Documents

You will need the following:

CIS deduction statements or payslips from contractors
Records of business income and expenses
Receipts and invoices
Bank statements
Proof of identity and address

3. Submit Your Self Assessment Tax Return

You must submit your tax return for the relevant tax year. The CIS deductions you have suffered will be offset against your final tax liability, and any overpaid tax will be refunded.

4. Receive Your Refund

Once your return is submitted, HMRC usually processes the refund within 2 to 4 weeks, depending on their workload.

How Much Can You Expect to Receive?

Most subcontractors receive refunds ranging from £1,000 to £3,000, depending on:

Total income received under CIS
Amount of tax deducted
Business expenses claimed
Other income or tax liabilities

Our experienced accountants can calculate your potential refund and ensure you receive the full amount you are entitled to.

Can You Claim for Previous Tax Years?

Yes. You can claim CIS tax refunds for up to four previous tax years. If you have missed previous claims, we can assist you in recovering those amounts from HMRC.

Why Choose SV&Co Accountancy to Handle Your CIS Refund?

SV&Co Accountancy, based in Southall, specialises in tax and accountancy services for construction industry professionals. With our tailored approach and industry expertise, we:

Identify all allowable expenses to increase your refund
Ensure your tax return is accurate and submitted on time
Deal with HMRC on your behalf to speed up the refund process
Offer transparent fixed fees with no hidden charges

We make the process stress-free and efficient — so you can focus on your work while we handle the paperwork.

Contact SV&Co Accountancy Today

If you think you have overpaid tax through CIS deductions, do not delay. Let SV&Co Accountancy help you reclaim what is rightfully yours.

SV&Co Accountancy
8 Stanley Road, Southall, UB1 1PA
Email: info.svco@gmail.com
Tel: 07957 946 562

Frequently Asked Questions

Q: When can I apply for my CIS refund?
You can apply after the end of the tax year, from 6 April onwards.

Q: What if I am not registered for Self Assessment?
You will need to register with HMRC and obtain a UTR before you can submit a tax return and claim a refund.

Q: Is there a deadline for claiming a CIS refund?
Yes. You can claim for up to four years from the end of the relevant tax year.

Why Dentists in Wembley Need Specialized Accountants

Running a dental practice in Wembley requires more than just providing excellent patient care. Managing finances, handling tax obligations, and ensuring compliance with HMRC regulations can be complex. That’s where specialized dentist accountants in Wembley come in. With a deep understanding of the unique financial challenges faced by dental professionals, they help streamline operations, minimize tax liabilities, and ensure financial stability.

Key Accounting Services for Dentists in Wembley

1. Tax Planning & Compliance

One of the biggest challenges for dentists is managing tax obligations efficiently. A specialist accountant ensures that you are compliant with HMRC regulations while identifying potential tax-saving opportunities.

Self-Assessment Tax Returns – Avoid penalties and ensure accurate submissions.
Corporation Tax Management – Optimize tax strategies for dental clinics.
VAT Advisory – Guidance on VAT registration and compliance.

2. Bookkeeping & Payroll Services

Accurate bookkeeping is essential for managing a successful dental practice.

Monthly bookkeeping – Keep track of earnings, expenses, and cash flow.
Payroll management – Process staff salaries, pensions, and tax deductions smoothly.
Expense tracking – Identify deductible business expenses to reduce taxable income.

3. Dental Practice Growth & Financial Planning

Whether you’re starting a new dental clinic or looking to expand, financial planning is crucial.

Business structure advisory – Sole trader vs. limited company: which is best for you?
Budgeting and forecasting – Plan for growth with financial projections.
Profitability analysis – Identify ways to increase revenue and reduce costs.

4. Specialist Support for NHS & Private Dentists

Dentists working under the NHS, private sector, or mixed practice have different accounting needs. An expert accountant will ensure your income, pension contributions, and NHS contract obligations are handled correctly.

Benefits of Hiring a Specialist Dentist Accountant

Expert knowledge of dental industry regulations
Maximizing tax deductions and reducing liabilities
Financial insights to boost profitability
Time savings, allowing you to focus on patient care

Choosing the Best Accountant for Dentists in Wembley

When looking for the best dentist accountant in Wembley, consider:

Experience working with dental professionals.
Knowledge of NHS and private dental financial structures.
Availability for ongoing support and consultations.