Digital record requirements for Limited Companies
Last Updated on 2 August 2025
There was an interesting bit of news for limited company freelancers a couple of weeks ago.
If you’re not sure what a limited company freelancer is, read this guide >
The government announced it was ditching the plans for ‘Making Tax Digital for Corporation Tax’.
Attentive readers of this blog will know that ‘Making Tax Digital for Income Tax’ is a big new thing for sole traders and landlords. (Read more in my earlier post >)
On closer inspection, the thing that’s being ditched is the idea that Limited Companies would have to do quarterly reporting of income and business costs as they go along.
(Quarterly reporting is what higher earning sole traders will do from April 2026.)
So companies can still use spreadsheets and shoe boxes?
Not so fast!!
There will be new requirements for companies to use special software to report profit and loss and balance sheet at the end of each tax year.
This will come in from April 2027, and will mean the end of paper filing and manual inputting of figures on gov.uk.
So no more ‘abridged accounts’.
This sounds to me very like ‘Making Tax Digital’, but just described differently, minus the three-monthly reporting requirement.
Anyway, if you’re a limited company freelancer, have a look at the new requirements and just check that you and your accountant are on the same wavelength.
You (or your accountant) may already be using software that generates the right reports at the touch of a button anyway.
Anything else?
If you’re a limited company freelancer you’re going to be known as a ‘micro-entity’ for the purposes of all this.
A ‘micro-entity’ ticks two of these three boxes:
- A turnover of £1 million or less
- £500,000 or less on its balance sheet
- 10 employees or fewer (editor’s note: HMRC say “…or less”. But they mean “fewer”, don’t they.)
Useful links:
Article from smallbusiness.co.uk >
Good summary from the excellent IPSE >
HMRC list of software limited companies will be able to use >
NB: David Thomas Media Ltd is not responsible for the content of other sites nor any financial advice provided by them.
Posted on 01 August 2025
