Making Tax Digital for income tax self-assessment (MTDfITSA) will launch in April 2023. Do you need to prepare for quarterly reporting?
All individuals earning more than £10,000 business and/or property income per year are required to join MTDfITSA from April 2023. The following will not need to join:
- Trusts, estates, trustees of registered pension schemes and non-resident companies
- Members of Limited Liability Partnerships, Limited Partnerships and partnerships containing a corporate partner are not required to join in April 2023 but will be required to join in the future. All other individual partners earning profits over £10,000 will join in April 2023.
An early draft of the regulations can be found here
What will MTDfITSA look like?
Businesses and landlords who join MTDfITSA will need to send a quarterly summary of their income and expenses to HMRC using MTD-compatible software. They will receive an estimated tax calculation to help them budget for their tax payments. The estimate will be based on the information entered and won’t account for any tax-relievable payments such as gift aid or pension contributions, or any tax due on other income (for example investment income and capital gains). At the end of the year, they can add any non-business information and finalise their tax affairs using MTD-compatible software. We will be using Xero for all our clients to create the information for this, this replaces the need for a self-assessment tax return.
What to do next.
You can prepare for the changes now if you would like to voluntarily sign up for the pilot scheme. Further details can be found here. You are not eligible for the pilot scheme you have received grants under the Self-Employment Income Support Scheme, Coronavirus Job Retention Scheme or the Eat out to Help Out Scheme.
For further information on this and other topics contact Tony on 07974-418819 or email at email@example.com or through the contact page of the website http://www.milestone-solutions.co.uk