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Will you join the MTD pilot launch?
16 March 2022
This month we’re sharing more insight for the digitalisation of Income Tax Self Assessment (ITSA) and launch of a pilot scheme. But before we do…
As we mentioned in our Making Tax Digital (MTD) update last month, MTD for VAT registered businesses with a taxable turnover below the threshold will go digital in April 2022. If you’re not prepared to submit returns digitally, please get in touch with us as soon as possible.
INCOME TAX SELF ASSESSMENT
MTD for ITSA is scheduled to go live for self-employed businesses and landlords with annual business or property income above £10,000 in April 2024.
The majority of businesses and landlords with business or property income above £10,000 will be required to sign up for MTD for ITSA, and then use compatible software for their income tax accounting for the first full accounting period starting on or after 6 April 2024.
In other words, MTD for ITSA will affect those who would normally declare more than £10,000 in the self-employment or property boxes of the Self Assessment tax return.
This will involve:
- An electronic submission of summary totals for specified categories from digital records of each business on a quarterly basis from the software to HMRC.
- Updates are due from 10 days before, to one month after the quarter end date.
- No tax is paid at this point.
- HMRC returns a calculation of the estimated tax liability based on the information sent.
- End of period statements (EOPS) will be required to be completed and submitted at any point after the accounting period or basis period date and up to the following 31 January.
- Final declarations effectively replaces the SA100 tax return – 31st January continues to be the deadline for filing.
MTD FOR ITSA PILOT LAUNCH
The government’s giving individuals who meet the criteria for MTD for ITSA an opportunity to take part in a pilot over the next tax year.
If you’re interested in taking part, speak with your Fortus team.
If you think you might meet the criteria for MTD for ITSA, but do not want to take part in the pilot, you should start to plan for April 2024 now by considering how to digitise your records and keep them up to date.
Quarterly returns will be due a month after the quarter end providing limited time to prepare the returns e.g. Quarter return for quarter ending 5 July 2024 will be due on 5 August 2024.
Please get in touch with us about what we will require and how you can best provide that information to us if you are unsure.
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