******UPDATE MTD POSTPONED UNTIL 2024******
MTD for Income Tax Self Assessment
We have all got used to Making Tax Digital for VAT – now it is the turn of the Self Employed and Property Businesses. (although not Ltd Companies as yet…). So what does this mean:
- Starting from April 2023, the Self Assessment tax return will be replaced by FIVE new reports : These will be due once a quarter during the year and then a final update when the tax return is normally due.
- NO MORE MANUAL LEDGERS ALLOWED… You will need to use some form or electronic records for your bookkeeping/accounting – either a spreadsheet or accounting software which is MTD compliant.
- You must be able to store your receipts and other records in an electronic format.
- The first tax return is due in the fourth month of your accounting period. For most people who have their accounting period starting on 6th April, this will be 5th Currently it looks like reports will be due within 1 month of quarter end but this is not yet confirmed.
Five tax returns a year
The first year is 2023-24 which runs from 6 April 2023 to 5 April 2024.
Assuming your accounting year matches the tax year, your timeline will be as follows:
- August 2023 – First report will be due
- November 2023 – Second report will be due
- 31 January 2024 – Your Self Assessment tax return for 2022-23 (the previous tax year) will be due.
- February 2024 – Third report will be due
- May 2024 – Fourth report will be due
- January 2025 – Fifth and final year-end report will be due
- The tax liability will need to be paid by 31 January of the next year (as is currently the case).
- You may be allowed to opt to pay your taxes as you go: the detail is not yet confirmed.
- Eventually, it is possible that you will be required to make four payments per year on account of tax.
April 2023 seems a long way ahead now, but the sooner you get into the habit of working electronically, the easier it will be when it becomes compulsory!
If you require any further information, or would like to speak to our award-winning accountants and bookkeepers based in Wolverton, then please do contact us.