Making Tax Digital for Income Tax from April 2024
It is HM Revenue & Customs’ (HMRC) plan to digitalise the UK tax system over the coming years.
Making Tax Digital (MTD) for Income Tax and Self Assessment (ITSA) will require sole traders and landlords with an annual business income above £10,000 to file returns at least quarterly using an MTD-compliant software or a bridging tool and an end of period statement covering the whole tax year. The legislation will take effect from April 2024, but general partnerships will not be required to join until the following year in April 2025.
This will see the largest change in our tax system since Self Assessment was introduced in the 1996-97 tax year. Although MTD for VAT has been around a little while, the sheer number of affected taxpayers for MTD for ITSA is going to be huge. As records will need to be kept digitally, please ask us about software so you can start to prepare for the change. Those taxpayers who leave preparation for the change until the last minute will, we believe, be the ones who feel the effects of the change the hardest. Software also has benefits over and above what is needed for compliance.
Please speak to us in plenty of time, as we will be able to offer support which will be anywhere between simply providing software up to a full book-keeping and filing solution, depending on the level of support needed.