Making Tax Digital for Income Tax coming soon

26th March 2024

Making Tax Digital for Income Tax will soon be upon us.

 

Over the past few years’ rents have been increasing and will continue to increase as inflation remains high. Many landlords will now be affected or will be coming close to the qualifying limits. With April 2026 fast approaching for those with qualifying income over £50,000 and from April 2027 for those with qualifying income over £30,000, action needs to be taken.

 

With this additional compliance coming into place, HMRC have estimated that those within the £30,000 to £50,000 threshold may incur a transitional cost of £350, plus an additional annual cost of £110 (totalling £460).

 

In addition, there is a requirement to change your basis period to the tax year (31 March or 5 April). You need to do this before MTD ITSA starts. If you do not change your basis period, you would effectively have two self-assessment tax returns always open and available to enquiry from HMRC.

Affected individuals will need to:
  • Keep accounting records in a digital format (using suitable software).
  • File quarterly returns to HMRC to including cumulative reports details of their income and expenditures.
  • Submit an end of period statement (EOPS) after the tax year, plus a final declaration, to finalise their affairs.

 

Choosing the right software for you

HMRC have a list of software providers which are compatible for the submission of the quarterly reporting. However we are already ahead of the game and are teaming up with a number of software providers including Hammock, to make the MTD ITSA process for residential property owners less stressful.

 

Get In Touch

For more information or advice on Making Tax Digital for Income Tax, contact your local Whitings office today.

 

Disclaimer - All information in this post was correct at time of writing.
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