Extra time to prepare for MTD for Income Tax
The final phase of MTD for VAT still comes in April 2022 with all VAT registered businesses needing to keep digital records, have digital links in place and submit their returns digitally to HMRC.
However, MTD for Income Tax Self-Assessment (ITSA) has been delayed by 12 months with the first phase now coming in April 2024. This will impact self-employed sole trade businesses and landlords with an annual turnover greater than £10,000.
General partnerships get a further 12 months to prepare with it not coming in until April 2025. While the date for more complex/larger partnerships such as LLPs is yet to be decided.
Don’t let the delay of MTD for ITSA delay you in embracing online accounting for your business. See this as extra time to invest in choosing the right software and finance eco-system for your business. Take the time to review all your processes and find ways to automate, utilise software and gain efficiencies.
Online accounting and keeping digital records does way more for your business than MTD compliance:
If you are already using compliant software and meet the qualifying criteria (below), you might wish to consider signing up for the MTD for ITSA pilot:
- sole traders with income from one business and landlords who rent out UK property
- provided Self Assessment tax returns and payments are up to date and you’re a resident in the UK for tax
- you cannot currently join MTD for Income Tax if you have income from any other source or if you have other payments you make that are taxable or that you claim tax relief on
To learn more about the topic explored in this article, contact us here.
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