Self-employed businesses and landlords with annual business or property income above £10,000 will need to follow the rules for MTD for Income Tax from their next accounting period starting on or after 06 April 2024. It was initially set to commence from April 2023 but was postponed by the UK Government on 27 September 2021.
To follow the rules for this, you’ll need to:
Keep digital business records
You will need to keep digital records of all your business income and expenses – you should start to keep digital records at the start of the accounting period you are signing up for.
Get compatible software
To keep records and send updates, it is important to make sure your software is compatible – you can follow the link here to check this.
You can sign your business up for MTD for Income Tax using the link here.
Send business income and expenses updates
You will need to send updates to HMRC every 3 months of your business income and expenses.
Finalise your business income
At the end of your accounting period, you need to finalise your business income in a declaration – this is where you confirm that the updates you sent are correct and make any accounting adjustments.
Submit a final declaration instead of a Self-Assessment tax return
Submit your final declaration after the end of the tax year it applies to. This is where you can tell HMRC about any personal income you have or reliefs you claim.
Currently, you can choose whether or not you follow the rules however you must follow them from 06 April 2024.
Accounts Navigator Associates has experts on hand to assist with any queries regarding Making Tax Digital – if you require any assistance, please do not hesitate to contact us on 01992 714010 or at firstname.lastname@example.org.
Knowing how to take control of your business finances to maximise profits can be difficult, especially with the current climate. Knowing the common mistakes to avoid can be difficult and can leave you feeling unsure.
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