HMRC Self-Assessment / MTD for Income Tax / FRS 105 Micro-Entity
UK Small Business Accounting & HMRC Self-Assessment Guide 2026
Complete guide to UK small business accounting: cash vs accrual basis, Making Tax Digital (MTD), Capital Allowances AIA (100% up to GBP1m), and FRS 105 micro-entity reduced disclosure accounts.
Overview
UK sole traders and partnerships file Self-Assessment tax returns (SA100) by 31 January annually. Limited companies file Corporation Tax CT600 within 9 months of year-end and annual accounts at Companies House within 9 months. Making Tax Digital for Income Tax (MTD for ITSA) becomes mandatory from April 2026 for self-employed persons with income over GBP50,000. The Annual Investment Allowance (AIA) allows 100% first-year capital allowance on qualifying plant and machinery up to GBP1,000,000.
Key Facts & Statutory Reference
| Item | Detail | Statutory / Official Source |
|---|---|---|
| Self-Assessment Deadline | 31 January (online filing) for prior tax year | HMRC SA Guidance |
| CT600 Deadline | 9 months from company year-end | CTA 2010 s.188 |
| Annual Investment Allowance | 100% deduction up to GBP1,000,000/yr | CAA 2001 s.38A |
| MTD for ITSA | Mandatory from April 2026 for income over GBP50k | Finance Act 2021 |
| FRS 105 | Micro-entity accounts (turnover under GBP632k) | Companies Act 2006 s.444 |
Frequently Asked Questions (FAQ)
Under the cash basis (available to sole traders with receipts under GBP150,000), income is recognised when cash is received and expenses when paid. Under accruals, income and expenses are recognised when earned/incurred regardless of when cash changes hands.
MTD for Income Tax Self-Assessment (MTD for ITSA) requires self-employed persons and landlords with qualifying income over GBP50,000 to keep digital records and submit quarterly updates to HMRC from April 2026. The threshold drops to GBP30,000 from April 2027.