Making Tax Digital for Income Tax is coming. It follows on from the very UNsuccessful introduction of MTD for VAT, however, it will be forced upon tax payers regardless of whether HMRC are ready or not, so it's time to get prepared.
The Government has noted that it recognises the challenges faced by many UK businesses as the country emerges from the pandemic over the last year. In recognition of this, they will now be introducing MTD ITSA a year later, in April 2024 instead of April 2023.
The government statement confirms that:
MTD for ITSA will be introduced from April 2024 for sole traders and landlords
General partnerships will not be required to join MTD for ITSA until April 2025
Under the requirements of MTD for ITSA, individuals who are subject to income tax on the profits of their trade, profession, vocation or property business will be required to keep their accounting records electronically and file quarterly returns to HMRC with details of their income and expenditure together with any other information that HMRC specifies. A final end of period statement will then be submitted after the tax year to complete the individual’s tax affairs.
Although the frequency of reporting is to change, the timing of tax payments will not and the current system of payments on account and balancing payment by 31 January after the tax year is expected to remain in place for the foreseeable future.
Read more detail at:
MTD for Income Tax
