The short answer
If a business’s turnover is under £90,000, you can send one total for its expenses in your Making Tax Digital quarterly update. These are called consolidated expenses. At £90,000 or more, HMRC needs the expenses split into categories. SimpleTaxFlow calls these Simple and Detailed, and asks you once for each business and tax year.
Part of Simple or detailed expenses for MTD.
The turnover question
For each business and tax year you are asked: do you expect this business’s turnover to be £90,000 or more this tax year? Choose No, use Simple or Yes, use Detailed.
You answer in your quarterly update in Tax, under Expenses in Check your figures. You may also be asked when you add a record in Money. A spreadsheet upload is refused until you answer. Until then, Money records need a category.
Turnover means your sales or rent before expenses. Other Income is not counted. For jointly owned property, your share of the rent is counted.
Simple: one total for expenses
On Simple, your quarterly update sends one total for your expenses. In Money, choosing income or expense is enough, and a record is confirmed when you save it. In a spreadsheet, fill in the Total Expenses line.
Detailed: expenses by category
On Detailed, your expenses are sent in HMRC’s categories, the same ones as on the SA103 and SA105 tax return pages. In Money, choose a category for each record. In a spreadsheet, fill in each category line.
When Detailed applies anyway
Your answer is a forecast. What you actually record can override it. If recorded turnover for a business reaches £90,000 in a tax year, Detailed applies for that tax year and the next. The page then shows Use Detailed for this business and explains why.
A forecast alone never carries forward. If you answered Yes, use Detailed but recorded turnover stayed under £90,000, you answer again for the next tax year.
- Recorded turnover reaches £90,000 this tax year: Detailed for this year and next year
- Recorded turnover reached £90,000 last tax year: Detailed for this year
- You expect £90,000 or more but have not reached it: Detailed for this year only
Changing from Simple to Detailed during the year
If Detailed starts to apply after you uploaded a spreadsheet on Simple, upload the file again with the expense categories filled in and the same Figures up to date. Then give any uncategorised Money records a category.
Residential finance costs stay separate
Landlords always keep residential finance costs, such as mortgage interest on residential lets, on their own line. This applies on Simple and on Detailed. HMRC gives a tax reduction for them, so they are not part of your expenses total.
Example
Sam is a decorator (fictional) who expects £48,000 turnover. He chooses No, use Simple and sends one expenses total. Priya (fictional) runs a shop and a rental flat. The shop expects £120,000, so she chooses Yes, use Detailed for it. The flat expects £9,000, so it stays on Simple. Each business has its own answer.
1. Answer the question in your update
Open Tax and choose Check update. Under Expenses in Check your figures, choose No, use Simple or Yes, use Detailed.
Open TaxBefore you move on
- Answer the turnover question for each business and tax year
- Use one expenses total on Simple
- Use each category on Detailed
- Keep residential finance costs separate
- £29.99 + VAT a year. Bookkeeping is free. Pay when you send to HMRC.
Frequently asked questions
Is the £90,000 for each business or all my income?
For each business. A sole trader business and a property business each have their own turnover and their own answer.
Can I change my answer later in the year?
Yes, in your quarterly update. The only exception is when recorded turnover has reached £90,000 this year or last. Then Detailed applies and the question is not shown.
What are consolidated expenses?
One total for all your allowable expenses, instead of a figure for each category. HMRC accepts them in a quarterly update when turnover is under £90,000.
Check the official rules
Tax rules can change and individual circumstances matter. Use HMRC’s current guidance to confirm the treatment that applies to you.
Put the guide into practice.
Open the relevant workspace and complete the next step with this guide available in another tab.
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