Draft legislations aims to simplify Making Tax Digital for Income Tax.
HM Revenue and Customs has published draft legislation for Making Tax Digital (MTD) for Income Tax which comes into effect in April 2024 for those sole traders and landlords with annual income over £10,000. This figure means the amount of your takings/rent collected, not the amount of profit you make. It is now less than 18 months before the most fundamental change for over 20 years in the UK tax system takes effect.
A welcome relaxation is that those with annual turnover below the £85,000 VAT registration threshold will only be required to provide two figures to HMRC as part of their quarterly reports. Those two figures are the total of income and the total of expenses, avoiding the need to split these out into various categories.
The requirement to keep digital records and submit these to HMRC using compatible software has not changed.
Although April 2024 might seem a long way off, planning well in advance will be key. Getting used to using software in plenty of time will ensure you have all the support you need and put you in the best possible position when the time comes. If you are not good with technology, don’t worry as we will also be able to provide you with a solution.
Please speak to us about software choices or if you have any concerns about Making Tax Digital. We are here to support you through this change.