Is Now The Time To Act?
Making Tax Digital for income tax self-assessment (MTD ITSA) may still be over a year away, but if you are self-employed or a landlord, now is the time to look at how it might affect you and your busienss.
When Will It Happen?
MTD ITSA will become mandatory on 6th April 2023.
Businesses will need to enter the new regime from the first accounting period commencing on or after 1st April 2023.
Who Is It For?
MTD ITSA applies to those who receive income from self-employment and/or property where, gross income is over £10'000 from those sources combined.
The current regulations do not cover partnerships; MTD ITSA is expected to be extended to general partnerships from April 2025.
How Will It Work?
Income and expenditure will have to be recorded digitally. Spreadsheets are fine, but, if you do it yourself, MTD-compatible software will be needed to submit quarterly updates.
A quarterly summary of income and expenses must be sent to HMRC.
A final declaration replacing the self assessment tax return.
There will be a new penalty system.
The biggest impact will be for those currently maintaining paper records.
Which Software?
If you are thinking of moving to a software package, be warned there are currently only seven providers of suitable software.
HMRC has issued guidance on MTD ITSA and as a Sage specialist Digital and Managment Services are here to help.
