SoS (602) Making Tax Digital for Income Tax

SCHEDULE OF SERVICES (602) MAKING TAX DIGITAL FOR INCOME TAX

This schedule should be read alongside your letter of engagement (LoE) and the (300) Standard Terms & Conditions.

Recurring Compliance Work

Making Tax Digital for Income Tax (MTD IT) requires individuals with qualifying income above the relevant threshold to maintain digital records and submit quarterly updates to HMRC, in place of a single annual Self Assessment return.

MTD IT is being introduced on a phased basis, with commencement dates determined by the level of qualifying income and other statutory criteria.

The services we provide depend on the service tier separately agreed with you. This schedule describes what each tier includes and where responsibility sits.

Commencement and Eligibility

Unless we have expressly agreed in writing to monitor your eligibility and commencement date on your behalf, responsibility for determining when MTD IT applies to you rests with you.

Where you become subject to MTD IT during the period of our engagement, this schedule applies from the date your obligations take effect.

We are not responsible for identifying or applying for any exemptions from MTD for Income Tax. If you believe you may be eligible for an exemption, please raise this with us.

Digital Record-Keeping

MTD IT requires you to maintain digital accounting records using HMRC-compatible software, record income and expenditure on an ongoing basis, and ensure your records are complete, accurate, and up to date.

Where you use bookkeeping software, it is your responsibility to use it in practice — not merely to have it set up.

We do not accept responsibility for records created retrospectively, incomplete or inaccurate bookkeeping, or transactions omitted, duplicated, or miscategorised by you.

Service Tiers

Our MTD IT services are provided under one of the following three tiers, as agreed.

DIY

You maintain your own digital bookkeeping records.
You prepare and submit all quarterly updates to HMRC.
You are responsible for monitoring and meeting all quarterly submission deadlines.
We prepare your End of Period Statement (EOPS), Final Declaration, and Self Assessment return once your quarterly submissions are complete.

We do not review quarterly submissions before you file them under this tier.

Supported

You maintain your own digital bookkeeping records and are responsible for your bookkeeping software.
We review your quarterly figures, provide guidance, and submit quarterly updates to HMRC on your behalf.
We prepare your EOPS, Final Declaration, and Self Assessment return.

Fully Managed

You provide us with your source records and financial information on the timescale we agree.
We handle all bookkeeping, quarterly submissions, EOPS, Final Declaration, and Self Assessment return on your behalf.
Bookkeeping services under this tier are governed by SoS (705) Bookkeeping, which forms part of your engagement where this tier applies.

Only the tier as agreed forms part of our agreed scope.

End of Period Statement and Final Declaration

Under all three tiers, we will prepare your EOPS and Final Declaration based on the information you have provided and, where applicable, your completed quarterly submissions.

You are responsible for reviewing and approving all submissions before we file them with HMRC, and for providing information in sufficient time to meet statutory deadlines. You remain responsible for the completeness and accuracy of all information you supply to us.

Ad Hoc and Advisory Work

Ad hoc queries by, for example, telephone or email are not part of routine compliance and may result in additional fees. Where possible, we will discuss and agree any additional fees in advance, but this is not always practicable and we reserve the right to charge for such work.

HMRC Penalties

HMRC operates a points-based late submission penalty system for MTD IT. Each missed quarterly deadline earns a penalty point; once the threshold is reached, a financial penalty applies.

Under the DIY tier, where you are responsible for submitting your own quarterly updates, liability for any late submission penalties rests with you. We are not responsible for penalties arising from submissions you make, or fail to make, independently of us.

Exclusions

Unless expressly agreed in writing, the following fall outside our scope:

Correcting or reconstructing incomplete or inaccurate digital records.
Monitoring submission deadlines under the DIY tier.
Submitting quarterly updates where adequate records have not been provided.
Penalties, interest, or surcharges arising from late, missed, or inaccurate submissions caused by your failure to provide accurate or timely information.
Software training beyond basic orientation, or any separately agreed tuition sessions.

VAT-Registered Clients

If you are also registered for VAT, your MTD for VAT obligations are covered separately under SoS (610) VAT Returns.

Your Responsibilities

You are legally responsible for:

Ensuring that all MTD IT submissions — including quarterly updates, your End of Period Statement, and your Final Declaration — are correct and complete.
Filing all submissions by the due date.
Paying tax on time.

Failure to meet these obligations may result in penalties and/or interest. You cannot delegate this legal responsibility to us. You agree to review and approve all submissions we have prepared before we file them with HMRC.

To enable us to carry out our work, you agree:

To provide all information necessary for dealing with your MTD IT obligations. We will rely on the information and documents you give us being true, correct, and complete, and will not audit them.
To authorise us to approach such third parties as may be appropriate for information we consider necessary.
To have paid our fee in full before we submit your quarterly updates, End of Period Statement, or Final Declaration to HMRC. Where work is complete but our fee remains unpaid, we reserve the right to withhold submission.

Where you want us to deal with HMRC communications, please forward all correspondence to us promptly. HMRC is not obliged to copy us in on communications sent directly to you, so it is essential that you pass these to us in time for us to act within any statutory time limits.

You will keep us informed of material changes in your circumstances that could affect your tax position. If you are unsure whether a change is material, please let us know so we can assess its significance.

As part of our normal procedures, we may ask you to provide written confirmation of any oral information and explanations given to us during the course of our work.

Limitation of Liability

Our services are subject to the limitations on our liability set out in your letter of engagement (LoE) and in the (300) Standard Terms & Conditions. These are important provisions and you should read them carefully.