With the Self Assessment deadline now behind us, many taxpayers understandably want to put tax to the back of their minds for a while. However, this quieter period is actually one of the best times to sense check what happens next, particularly around PAYE and Making Tax Digital.
A small check now can prevent much bigger issues later.
Check Your PAYE Is on Track
Now that your Self Assessment has been submitted, it is a good time to review your January payslip and make sure you are paying the correct amount of tax through PAYE.
HMRC will often amend tax codes following the submission of a tax return. This may be to:
- Collect underpaid tax from an earlier year
- Remove allowances or reliefs that no longer apply
- Account for additional income such as dividends or benefits
If these changes go unnoticed, they can quietly result in an unexpected bill when you come to complete your 2025/2026 tax return.
Taking a few minutes now to review your payslip, particularly your tax code, taxable pay and deductions, can help you identify issues early and correct them during the tax year rather than after it ends.
You can sense check your figures using the payslip calculator on our website.
Looking Ahead to Making Tax Digital
This post Self Assessment period is also a sensible time to look ahead to Making Tax Digital (MTD), particularly if you are self employed or receive property income.
MTD for Income Tax represents a shift away from a single annual tax return towards:
- Digital record keeping
- Quarterly updates submitted to HMRC
- A final end of year declaration
While this change will be introduced gradually, it will affect a large number of taxpayers over the next few years.
When Does Making Tax Digital Apply?
MTD for Income Tax is being rolled out in stages, based on your combined gross income from self employment and or property.
The current timetable is:
- From April 2026
Individuals with combined gross income over £50,000 will be required to comply with MTD. - From April 2027
The threshold will reduce to over £30,000. - From April 2028
Individuals with combined gross income over £20,000 will be brought within MTD.
If your income is below these thresholds, MTD for Income Tax will not yet be mandatory. However, some businesses may still choose to adopt digital record keeping earlier to improve accuracy and cash flow visibility.
It is also important to be aware that:
- The thresholds are based on gross income, not profit
- Income from multiple sources is added together
- Once within MTD, quarterly updates are required even if income fluctuates
Am I Affected by Making Tax Digital?
You are likely to be affected if:
- You are self employed
- You receive rental income from property
- Your combined gross income from these sources is £50,000 or more for financial year ending 2024/2025
- You currently complete a Self Assessment tax return
You are unlikely to be affected for now if:
- All of your income is taxed through PAYE only
- Your self employed or property income is below £20,000
- You are not within the Self Assessment system
If you are unsure where you sit, it is worth checking now. The MTD thresholds reduce over time, and understanding your position early makes the transition far easier.
Why It Is Worth Thinking About This Now
Even if Making Tax Digital does not apply to you immediately, understanding where you sit against the thresholds gives you time to plan. Moving to compliant software and adjusting to more frequent reporting is far easier when it is done gradually rather than under pressure.
The weeks after Self Assessment offer a natural reset point. It is a chance to make sure your PAYE position is correct and to prepare for upcoming changes without the stress of deadlines.
If you would like help reviewing your tax code, PAYE position, or MTD readiness, we are here to support you.
Final Thought
A quote from our Principal, Sunil Aggarwal:
Once the Self Assessment deadline has passed, many people feel a sense of relief, but this is a valuable moment in the tax year. A short review now of your PAYE position and future obligations, particularly with Making Tax Digital on the horizon, can prevent unpleasant surprises later. It’s also a poignant moment to consider tax planning before the end of March. Good tax planning isn’t about last-minute fixes and decisions, it’s about staying ahead.
If you would like help checking your PAYE, understanding Making Tax Digital, or planning ahead, please get in touch.
You can:
- Email: info@drs-tax.com
- Telephone: 020 8059 1891
- Submit an enquiry via our Contact Us page
You can also book a free 15-minute consultation to review your position and explore how we may be able to support you.