MTD what’s next?

Published: 10/08/2022 By Hannah McCormack

MTD has been around for a while with the majority of people enjoying it's benefits of the easier and more streamlined way of doing things, by keeping their VAT records digitally as well as sending them to HMRC via digital software.

April this year saw the start of MTD for VAT where all VAT registered businesses had to comply with MTD, submitting their VAT returns digitally using HMRC compliant software such as QuickBooks and Xero and the first return fell due on 7th August. But what is the next category to be affected by MTD?

MTD for Income Tax Self Assessment (ITSA) will come into effect from April 2024, for those whose gross total income from self-employment and or property rental income exceeds £10,000. If you fall into this category, you will be required to keep digital records of your trading and or property transactions and submit quarterly reports to HMRC. Once submitted you will receive an estimated tax calculation from HMRC which will enable you to budget for your tax year. There will no longer be a Self Assessment Tax Return but you will be able to add any required information and finalise your taxes at the end of the tax year still using your MTD compliant software.

If you don’t already keep digital records now would be a good time to get started, give yourself some time to get to grips with the new software. There are many software options available and HMRC have a search facility on their website so you can check if what you have or are thinking of using is one of their compliant software packages, click here for more info, the number of MTD ITSA software packages are currently limited to the bigger suppliers but as the date gets nearer to April 2024 there will be more options available.

If you need help with any aspect of MTD please get in touch as we can talk you through your options as well ensure you are set up in time for the next MTD deadline.