The government extended the requirement to operate Making Tax Digital (MTD) to the 4.2m taxpayers with business and/or property income over £10,000, including landlords, sole traders and partnerships, for their Income Tax obligations.
These changes will apply to businesses, self-employed individuals and landlords who are chargeable to Income Tax.
Under MTD, businesses must keep digital records and use third-party software to submit their tax returns to HM Revenue and Customs (HMRC). Under the changes, those mandated to use MTD ITSA will need to keep records of their income and expenditure digitally and send a quarterly summary of income and expenses, and an end of year report, using MTD compatible software (or applications).
The software these businesses use must be MTD enabled, and capable of receiving information from HMRC digitally via HMRC’s Application Programming Interface (API) platform.
MTD for ITSA will apply from April 2024.
Which means the relevant self-employed traders, including landlords, will need to have their accounts in a digital format by that date, April 2024.
Affected traders who are still undecided how best to meet these requirements need to get their digital skates on.
We can recommend suitable software and help you with installation.
The clock is ticking.