Stuart Hulland, Partner at Bates Weston gives an update on the next phase of Making Tax Digital, MTD for Income Tax Self Assessment, now that the MTD VAT deadline has passed.
As of April 2024, MTD for ITSA will require sole traders and landlords with an annual business income above £10,000 to file digital returns at least quarterly using MTD compliant software or a bridging tool. An “End of Period Statement” for each income source must also be submitted at the end of the tax year.
General partnerships will be included in MTD for ITSA from April 2025. The date when all other partnerships ( such as LLPs and those with corporate partners) has yet to be confirmed.
As a profession, accountants are planning for the changes this will bring, in particular helping clients to access cloud based accounting solutions.
At Bates Weston we have long been advocates of cloud based accountancy packages. We are a Xero Platinum partner but are able to use almost any software a client prefers. The benefits reach beyond compliance with HMRC’s MTD initiative. As your accountants, if we have access to your real time financial data, we can give you real time advice based on it. It changes our focus from historic reporting to actively helping your business on a day to day basis.
We are already planning for the internal changes MTD for ITSA will bring to our practice – the need for quarterly reporting chief among them. We are looking at which clients are impacted by the MTD for ITSA regime, in particular those who are not VAT registered and therefore may not yet have had the need to move to MTD compliant digital record keeping.
We will keep an eye on developments but if you would like to speak with us about preparing for MTD for ITSA, please do get in touch.