The digital revolution is upon us, in more ways than you may think.
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) will be officially rolled out in 2024, meaning more people have to start thinking about managing their tax returns online.
Said to minimise errors and make processes more efficient, MTD for ITSA isn't something to bury your head in the sand over. Here's how it will change the way you manage your taxes.
What does MTD for ITSA really mean?
Landlords and sole traders will need to collate their tax records electronically and send the reports to HMRC via MTD-compatible software.
As of 6 April 2024, businesses, self-employed people and landlords with a gross annual income over £10,000 will be legally required to submit their returns online. This means any income or trading figures, expenditures and claims for allowances and relief must be submitted before the relevant deadlines.
These deadlines will fall quarterly for all unincorporated businesses on:
- 5 August
- 5 November
- 5 February
- 5 May
Businesses with accounting dates between 31 March and 4 April will also need to file by these deadlines, so businesses with their dates falling on 31 March will gain an extra 5 days due to the change in reporting periods.
You'll also be required to submit an end of period statement and submit your final declaration and the tax you owe by 31 January the following year.
The first MTD return for landlords and sole traders under ITSA for the first quarter to 5 July 2024 will have to be with HMRC by 5 August, which falls on a Saturday in the summer bank holiday in Scotland.
When you need to sign up by
It is already possible for you to sign up to the MTD for ITSA pilot scheme. In doing so you are getting ahead of the game and saving yourself the stress of signing up at the last minute.
As mentioned, you need to be registered before 6 April 2024, irrespective of the end of your current accounting period.
To sign up you'll need your:
- Business name
- Business start date or the date you started collecting property income
- Email address
- National Insurance number
- Accounting period
- Accounting type (eg cash or standard accounting)
You will also need to be registered for self-assessment tax returns and have your Government Gateway ID and password. If you don't have an ID, you can create one when you sign up to MTD for ITSA.
What you will need
The first step you need to take is to download MTD-compatible software. There are a few options to choose from, depending on your preference.
Xero and Quickbooks are just two examples of MTD-ready accounting software you can use to store all your financial information and submit your returns.
You can also give your accountant access to these programmes, meaning you will both be able to keep track of your figures in real time.
It'll be 2024 before you know it, so by signing up today to MTD for ITSA you're saving yourself a lot of hassle.
The accounting team at Lawrence Grant has years of experience when it comes to tax returns. Get in touch today to find out how we can help.
https://mcl.accountants/news/mtd-for-landlords-sole-traders/
We're not a fan of spam either, so we will not pass on your information onto any 3rd parties. What you give to us, stays with us.