MTD for Income Tax – About the new rules

mtd for income tax

MTD for Income Tax – About the new rules

 

HMRC has said that new rules requiring “Making Tax Digital (or MTD) for Income Tax” will come into force from 6 April 2024. The rules will be for self-employed businesses and landlords in the UK with yearly property or business income of more than £10,000.

We’ll be watching these plans as they unfold and will update self-employed and landlord readers as they develop. When this deadline comes around we’ll be managing all our self-employed clients’ needs in line with these new HMRC rules – see our self-employed service offering here.

What is “MTD for Income Tax”?

According to HMRC it is a “new way of reporting income to HMRC” by using software that keeps and uses your “digital records” to report your taxable income to them instead of filing an annual self-assessment tax return.

Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot. The intention being to help develop the service before wholesale use. During this pilot scheme, if you are a self-employed business or landlord you can voluntarily use software.

Eventually, when fully adopted, taxpayers will be keeping business records digitally and send Income Tax updates to HMRC instead of filing a Self Assessment tax return.

How to prepare.

April 2024 does seem a long time away from today in February 2022 right?  And when we’re running businesses the time can tend to fly by pretty quickly.  So what does the business owner need to do between now and then?

If you haven’t been using some form of digital accounting system, consider moving to one over the next year. Making sure the reports it runs provide a clear link to your invoices.

And there’s many to choose from out there nowadays. Here’s a list of the current software firms that are on the HMRC page. These are described as either already having the solution in place or developing a solution.

 

 

Comment (1)

  • 就爱要 Reply

    Where there is a will, there is a way.

    7 June 2022 at 7:12 pm

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