Making Tax digital for Self Assessment for Landlords and Self-Employed Businesses
We’ve had MTD for VAT registered businesses – now fully implemented for all VAT registered businesses. Now it is the turn of the Self Employed and Landlords – generally referred to as ‘MTD for ITSA’ (Making Tax Digital for Income Tax for Self Assessment).
From April 2024…
- Instead of one tax return a year you will need to file (and pay) five (Yes 5) – a quarterly one and a year end one to wrap up any error corrections and any other income.
- All businesses with a year end that is not Currently 31st March will need to bring their financial year end into line with the tax year. g, if your financial year end is currently 31st August, you will need to make adjustments in your tax returns to bring these into line.
This has real implications for those businesses with overlap profits brought forward from the start of their business, and you may find that you have additional tax to pay in the first tax period after April 2024.
Points DON’T mean prizes:
The penalty regime for late filing for BOTH VAT and ITSA is changing also. There will be a points system – one point for each missed deadline. Points are applied separately for VAT and for ITSA. Once you reach 5 points for monthly submissions, 4 points for quarterly submissions or 2 points for Annual submissions a £200 penalty is applied.
Points expire after 2 years but not if you have received a penalty already – then you need to prove your good behaviour. The required periods of good behaviour are 24 months for an annual submission frequency, 12 months for a quarterly submission frequency, and six months for monthly submission frequency.
Late Payment penalties are also changing:
- Up to 15 days after payment was due: no penalty.
- Day 30 after the payment was due: 2% of the amount.
- Day 31 after payment was due: 2% of what was due on day 15, plus 2% of what was due on day 30.
- Day 31 onwards: 4% of the outstanding amount, applied daily.
In order to be ready for the starter pistol, it is as well to start getting your accounts onto MTD ready software NOW. Talk to your Accountant or Bookkeeper about the next steps you need to take.
If you would like to speak to our award-winning accountants and bookkeepers based in Buckinghamshire, then please do contact us.