Reminder re Making Tax Digital for Self-Assessment
As we have mentioned in previous news posts, HMRC are continuing with their plans to expand their Making Tax Digital initiative, which encourages business owners to maintain their bookkeeping records in electronic formats, which should be easier to report on should HMRC require information.
Businesses who are registered for VAT due to their turnover being above the VAT registration threshold are already keeping their records in this manner and are filing their VAT returns electronically with HMRC.
HMRC intend to push more businesses into Making Tax Digital over the coming years, starting with Landlords and the Self-Employed. Those individuals with combined annual self-employment AND property income above £50,000 will need to follow the rules for MTD for Income Tax from their next accounting period starting on or after 6 April 2026, which is a delay from the initially planned date of 6 April 2023. Then, those individuals with earnings of over £30,000 will be mandated to be MTD compliant from 6 April 2027.
We feel that for some of our clients, the change in standard of bookkeeping that will be required and also the transition to using computer software might be more of a challenge than they realise. We therefore suggest that business owners/managers speak to us well in advance of when they have to start complying with these rules. This way, they would be able to slowly get used to the new way of preparing their accounting records and not have to worry about mistakes right away.
If you wish to discuss this, or if you are unsure what this means for your accounting and tax record keeping, please contact us.