MTD (making tax digital) for VAT has now been fully implemented so we’re starting to help our clients look forward to the next phase which concerns income tax and self assessment (MTD ITSA).
From April 2023 sole traders and landlords earning more than £10,000 income will have to make quarterly submissions to HMRC. A fifth submission will also be required later with any of the usual year end adjustments that we usually do for you that haven’t already been reflected in the quarterly returns.
As the lower limit is based on income rather than profit this change will apply to many accidental landlords who have chosen to rent out a former home rather than sell it. This is a disproportionate increase in admin for smaller clients and we will help you to minimise the extra workload.
Timescales are getting tighter too. These submissions will have to be made just 30 days after the end of the relevant quarter compared to VAT submissions that are currently due 1 month and 7 days after the quarter end.
The other thing of note is that three of these submissions for the tax year 2023/24 will need to be submitted before the annual tax return for 2022/23 is finally due on 31 January 2024 so our team are going to be exceedingly busy during this period.
We are awaiting details of exactly what will be required in the quarterly submissions but there are some things that can be done already to help with the quadruple workload in that initial period
If we usually prepare weekly or monthly management accounts for you then we don’t anticipate any major changes and we’ll add the tax submissions to our current work for you.
As always we will keep our clients informed as we learn more.