Budget 2026: what it means for you and your business —
In short
We prepare accounts for sole traders, partnerships and LLPs, feeding directly into partners’ Self Assessment returns and, for LLPs, into the Companies House filing obligation. Since 6 April 2026, sole traders and landlords with gross income over £50,000 must keep digital records and file quarterly under Making Tax Digital for Income Tax — a threshold measured on turnover before expenses.
From 6 April 2026, if your qualifying gross income from self-employment and/or property exceeded £50,000, you must
keep digital records and submit quarterly updates to HMRC through compatible software.
The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.
The critical detail: qualifying income is measured on gross turnover and rents, before deducting any expenses. A
sole trader with £60,000 of turnover and £40,000 of costs — £20,000 of actual profit — is in scope. This catches an
enormous number of people who assume it applies to profit.
It depends on your profit level, your risk, your plans and how you draw income. A limited company offers limited
liability and can be more tax-efficient above a certain profit — but it brings public filing, more administration,
and the 2026/27 dividend rates now bite harder (a £500 allowance, and rates of 10.75% / 35.75% / 39.35%).
There is no threshold at which incorporation automatically becomes right. It is a calculation on your actual
numbers, and we run both scenarios before you decide. See Business Start-Up & Structure.
A general partnership does not file accounts publicly, but must prepare accounts to support the partnership return
(SA800) and each partner’s Self Assessment.
An LLP does file accounts at Companies House, and is subject to size thresholds broadly mirroring those for
companies — including the audit exemption limits. LLPs also file a confirmation statement.
Partnership agreements matter enormously here: profit-sharing ratios, capital accounts and what happens when a
partner leaves all flow through the accounts.
This is the single most misunderstood point in Making Tax Digital. If your turnover and rents — before any
expenses — exceed the threshold, you are in scope, however modest your actual profit. If you are unsure, ask
us to check.
MTD-ready — records and software prepared ahead of your deadline, not after it.
The incorporation question answered with numbers, not a rule of thumb.
Accounts that feed straight into Self Assessment — one firm, one process.
Partnership and LLP experience — including profit-sharing and capital accounts.
Fixed fees, agreed up front.
This page provides general information about the 2026/27 UK tax year and is not advice on your particular circumstances. Tax and regulatory rules change frequently. Please contact us before acting, or refraining from acting, on anything set out here. LMJ Group is a firm of Chartered Accountants regulated by the ICAEW. LMJ Group is not a registered auditor and does not provide audit services. Last reviewed: July 2026.
