MTD Extended To Self-Employed And Landlords From 2023
There will be five new reporting obligations ...
Posted by Helen Beaumont on 12/08/2020 @ 8:00AM
Making Tax Digital has been slowly becoming mainstream with HMRC pushing it into new areas as time goes by. They have recently announced that the self-employed and landlords will be part of the scheme from April 2023 ...
MTD is rolling out to the self-employed and landlords from April 2023!
copyright: joykid / 123rf
VAT registered business have been part of the scheme since April 2019, but they're used to the quarterly reporting and payment schedule so it was natural for HMRC to start with them. The self-employed and landlords only report once a year, so this is a big change for them.
The Government believes Making Tax Digital will make it easier for individuals to keep on top of their tax affairs and will help cut back on filing mistakes. In 2018-19, this cost the Treasury some £8.5 billion, so you can understand why they are extending MTD.
It is proposed that:
the Self Assessment tax return will be replaced by five new reporting obligations made during and after the tax year
your first tax return under such a system is due in the fourth month of your accounting period, you will then have to file with HMRC every three months
if you are not already using software for your record-keeping/accounting, you will need to learn how to use a spreadsheet or some type of accounting software or App
you will need a reliable internet connection and a facility to store your electronic data
this measure is due commence on 6 April 2023
There are exclusions to the electronic bookkeeping and filing part of Making Tax Digital if you are unable to do so because of age, disability or religion, however you will need to satisfy HMRC before they will agree to your request to be excluded.
For the first year, the self-employed and landlords will be permitted to pay their taxes as usual and without penalty, but after that, HMRC are expecting four payments per year with a top-up/refund being made after filing for your financial year end.
The usual penalties for late filing and payment will then apply.
Until next time ...
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About Helen Beaumont ...
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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