If you’re a private enterprise or family business owner/executive, are you aware of significant changes coming down the track for the way you report your personal tax affairs?
MTD takes off
Making Tax Digital (MTD) has long been on the horizon as HMRC strives to modernise the UK tax system. But now it is here for a significant swathe of personal taxpayers.
Effective from the beginning of April, sole traders and property landlords (with some exemptions) must now report their income and expenses on a quarterly basis through a direct feed to HMRC. The first reports are therefore due by 7 August 2026 (for the 3 month period to 5 July).
This marks a huge shift – the biggest change to personal tax compliance since the self-assessment regime was introduced at the end of the 1990s and the first online filing service began in 2000.
For family business owners and entrepreneurs, this marks the beginning of a shift that will in time, come to include them if it doesn’t already. Whilst the timetable for broader adoption is still unclear. It will change how they collate and report their personal tax information. Whilst in the early stages this may require some getting used to, in the longer term as MTD develops and more taxpayers are pulled into the system, it should ease the burden on individuals, their finance teams and their family offices with more of the process becoming automated. The ambition is that information will be transmitted in real time and largely become a task of checking and verifying the data rather than an onerous, end of year task to collate it all.
Good tax advisors have a big role to play here, helping clients navigate the new requirements, supporting them to prepare and reduce the risk of missteps. At KPMG, we can support clients to meet their MTD obligations and more broadly have already invested significantly in developing our own systems that help reduce the administrative burden on clients. Utilising our client portal, we have worked to provide for a streamlined route through which to request, provide and review client data, in a clear and secure environment. Clients are also able to communicate and access their tax records whenever continent to them. We continue to develop as AI advancements provide for new opportunities for us to serve our clients in increasingly intuitive ways.
Taking a longer-term view
This theme of automation and moving tax reporting to a real-time basis fits well with the zeitgeist amongst our family office and private client base. The changing tax landscape – most recently focused on the inheritance tax regime – together with the general volatility of external conditions has prompted more of our clients to step back and think about longer-term strategic planning for their estates. Rather than being caught up in day-to-day admin and compliance requirements, there continues to be a growing appetite to think about the purpose of wealth creation and business activities: what are the ultimate goals and objectives, what succession arrangements are needed, what does the next generation in the family aspire towards?
Ultimately, the modernisation of tax compliance processes should give founders and entrepreneurs more time and greater real-time data to enable informed reflections on these questions and make adjustments to their affairs accordingly.
This includes an increasingly international outlook with many clients now operating in multiple jurisdictions. One of the most significant changes to the IHT regime in the UK – apart from reduced APR/BPR relief on assets over £2.5 million – was the introduction (from April 2025) of a residency-based system whereby if an individual has lived abroad for more than ten years of the previous 20, their foreign assets are excluded from IHT. This effectively creates a pathway out of IHT. This is much more than just a tax question of course – raising whole questions about where and how people want to lead their lives – but it’s a sign of the complexity of the range of choices with which many HNWIs are faced and which our job as advisors is increasingly focused on.
KPMG can help
There is also the challenge of navigating so much change and the information overload that can bring. This is another area where a good advisor can add real value – using sophisticated analytical tools to cut through the noise and help bring greater clarity to clients. It’s something that we regard at KPMG as one of our key functions – striving to be trusted advisors rather than just calculators of tax.
If these issues resonate with you, do get in touch. Our extensive private enterprise and family office tax advisory teams are ready to help you pick a path through the changing landscape, support compliance and help improve the long-term management of your assets and wealth.
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