Making Tax Digital

Navigating finances as a lash artist can feel very overwhelming, especially with new regulations like Making Tax Digital (MTD) changing how you manage your books. That’s why we’ve teamed up with Ria-Jaine, an expert who truly understands both sides.

In this blog, lash artist turned accountant, Ria-Jaine, shares her insight into how Making Tax Digital affects your lash business, what it means for your day-to-day admin, and what it is and how it's changing. 

Making Tax Digital For Income Tax

Making Tax Digital for Income Tax will require self-employed lash technicians earning over £50,000 to submit quarterly updates to HMRC from April 2026 using compatible bookkeeping software.

If a self-employed lash technician earns more than £50,000, they must join MTD from April 2026 and remain in quarterly reporting for at least three years even if their income later falls below the threshold.

This means that even if you hit the MTD threshold once - you are locked in for 3 years. 

This change is called Making Tax Digital for Income Tax (MTD ITSA) and is separate from Making Tax Digital for VAT.

From April 2026, you’ll need to follow Making Tax Digital if your total income before expenses from self-employment or property is over £50,000. This is based on all the money you bring in, not your profit, and it’s worked out using your last tax return, not what you’re earning right now.

This threshold reduces to £30,000 in April 2027 and £20,000 by April 2028 - meaning that most lash techs will be caught by the new reporting rules. 

Seeing 4-5 clients per day across a typical working week can place many lash technicians close to or above the first MTD threshold depending on treatment pricing.

HMRC are reaching out to those that are required to get started with MTD based on previous tax returns however they have said that if you havent received a letter, it should not stop a tax payer from signing up if they know their income levels in the last tax period were high enough in the 24/25 tax return that was due for submission by 31 January 2026.

HMRC letters are guidance only. Eligibility is determined by your submitted tax return, not whether you receive a letter.

MTD is not optional once triggered and HMRC is introducing a points-based penalty system for late submissions and late payments under MTD. The key change is that taxpayers entering MTD must keep digital records of income and expenses and submit updates to HMRC using compatible software.

Spreadsheets can still be used if connected to bridging software that submits data to HMRC.

The three year rule, is designed to stop businesses moving in and out each year. This change means that all self employed tax payers and landlords need to set up a bookkeeping system and process that makes it convenient and simple to submit the regular data to HMRC with ease. 

What is changing?

Self employed business owners and landlords will need to:

• Submit quarterly information and and end of year summary to HMRC - bookkeeping systems become a non-negotiable part of running your business

• Bookkeeping will need to kept up to date year-round and not just when the deadline is approaching - this makes it easier to track tax payments coming due

• Expense tracking will be captured in real time - a real opportunity to manage cash flow for business owners

• Software becomes essential rather than optional

• Tax visibility will increase throughout the year

The new structure is:

• 4 Quarterly updates
• 1 End of Period Statement
• Final Declaration

Quarterly submissions are updates based on current bookkeeping records and do not create a final tax bill until the year-end submission is completed.

At the end of the tax year you will still confirm your final taxable position through an End of Period Statement and Final Declaration.

When does this change?

For the 2024/25 tax returns that show income over £50,000 this is changing now.

MTD for ITSA starts April 2026.

This wave of tax payers will be required to stay in the MTD regime until at least April 2029 even if income drops below £50,000. 

The threshold reduces to £30,000 in April 2027 

The threshold reduces to £20,000 in April 2028

The move to quarterly reporting follows the recent basis period reform changes, which aligned all self-employed businesses to the tax year ending 5 April.

Quarterly submissions do not change the current deadlines for when tax is paid. Payments on account in January and July still apply.

The first quarterly update deadline is due 7 August 2026.

Why act now?

Lash technicians often cross the threshold faster than expected because income includes:

• deposits
• cancellation fees
• training income
• product sales
• affiliate earnings
• platform payouts before fees

If you run more than one self-employed business, the income is combined for MTD eligibility.

Your first MTD year overlaps with your normal tax return obligations, meaning many business owners will manage two reporting systems at once during transition. You will still complete a normal Self Assessment tax return alongside quarterly reporting requirements.

Keeping strong bookkeeping and accounting records will protect profits and help with real time cash flow tracking, something that is crucial for business to survive and grow so MTD readiness could reduce the stresses that often come with scaling and growing a business. 

Booking platforms do not replace bookkeeping software and do not meet HMRC’s digital record-keeping requirements on their own. Many lash techs underestimate turnover because booking platforms show net payouts after fees rather than total income received so double check everything as we enter the new tax year.

If you submitted a tax return for 24/25 that shows income of over £50,000 then you now need to:

• Start preparing the 25/26 tax return
• MTD Registration usually happens shortly before April 2026 once compatible software is in place. 
• Set up and get used to MTD compliant software
• Set up a dedicated business bank account to link with the MTD compliant software
• Set up or review current bookkeeping systems and processes, and a process for tracking expenses in real time
• Submit quarterly MTD submissions from July 2026
• Manage other taxes alongside
• Remember to submit the 25/26 tax return
• Manage the July 2027 payment on Account if the tax bill was high enough for 24/25 tax return

Does MTD Change When I pay tax?

No - MTD only changes how often you report income, not when the tax is due.

What to do right now?

Check your last tax return turnover and review if you are caught in this first wave of tax payers signing up to Making Tax Digital. You will need to ensure that all sources of income are tracked correctly to do this. 

You may be exempt from MTD if:

• digitally excluded
• unable to use software due to age/disability/location
• your business is a partnership (until later phases)
• you are within the income threshold

If you are not exempt then you should prepare before April 2026 ends, not after.

Run an MTD readiness check early for a quick roadmap to getting set up for success.

If you would like to go through your MTD Readiness or discuss options of software and processes to help you get in touch. Our MTD Readiness packs help self-employed beauty business owners get started stress free or we can take care of all of the daily bookkeeping to make sure your data is always up to speed.

Working with an accountant familiar with the beauty industry can make the transition to MTD significantly easier.

Ria-Jaine a former lash technician - is a multi award winning accountant, founder of The Beauty Accountant, BABTAC Finance expert and advisor to the GUINOT franchise network. Ria has been advising the hair and beauty industry since 2018 in all things tax and accountancy.

To learn more about the topics discussed in this article or for tax and accountancy services contact Ria instagram.com/riajaine or hello@thebeautyaccountant.co.uk