On the 6th April 2024 there are changes coming to the way we report your income tax. The original launch date for this new change was April 2023, however HMRC have extended this a further year. The 6th April 2024 may seem far away, but we would like to get ahead of this change and make sure that all of our clients are ready for Making Tax Digital (MTD) to ensure a smooth transition to the new rules.
So what is MTD for income tax?
MTD for Income Tax is a new way of reporting income to HMRC. MTD for Income Tax requires digital records and submission of Income Tax updates on a quarterly basis in addition to a final declaration by 31st January following the tax year.
Who is required to do this?
If your annual qualifying income is more than £10,000 you will need to be MTD ready by 6th April 2024.
Qualifying income is your total profits from your self-employed trade and rental income. If your qualifying income is less than £10,000, you are not required to sign up to MTD but can do so on a voluntary basis if you wish to.
How does this effect you?
You will need to ensure you are using the correct software that is compatible with MTD for income tax. Alternatively, give us a call and we can set this up and manage this for you.
Unfortunately, the deadlines for the quarterly submissions are not going to be generous. Each of the quarterly submission is due within one month of the period end.
If you do not already have one, you will need to create a Government Gateway account.
You can do this on Gov’s website https://www.gov.uk/log-in-register-hmrc-online-services/register
What will we do for you?
As an agent, we can sign you up for the necessary MTD services and file these returns on your behalf. In addition to filing the returns we are able to process the information for you on our compatible software.
We appreciate this may be a big change for some of you, which is why we are preparing for this early.
If you have any questions or are concerned you may not be able to comply with the above, please do give us a call and we can discuss options.