It’s exactly six months today before the controversial launch of Making Tax Digital (MTD) for Income Tax for landlords with qualifying income over £50,000.
MTD director Craig Ogilvie says: “Tax is changing and with just six months until Making Tax Digital for Income Tax comes into effect, now’s the time to start preparing.
“MTD is about spreading your tax admin throughout the year instead of that January scramble to complete your Self Assessment return.
“There are free software options available, and early feedback from our testing participants shows the system is straightforward once you are familiar with it.”
Ogilvie says getting on to HMRC’s testing programme – details below – gives the chance to get comfortable with the new system before it becomes mandatory and to access the Revenue’s support team, which he says is “essentially a safety net while you learn the ropes.”
He says landlords will not be filing extra tax returns under the new regime. The required quarterly updates are simple summaries that the new software generates automatically.
“If you spot an error, you can fix it in the next update. More than 2,000 updates have been successfully submitted in the testing programme and feedback from those involved has been. encouragingly positive” he says.
Ogilvie says landlords will have to use , compatible software, but adds: “There are free options as well as ones you have to pay for. There isn’t a one size fits all – the key is finding which software works for your business. The software will give you real-time estimates of your tax bill
throughout the year, helping with cash flow planning and avoiding nasty January surprises.”
And he says if you’re already using spreadsheets or accounting software, you can get compatible software that connects to your existing records and meets the new requirements.
HMRC links to help landlords are https://makingtaxdigital.campaign.gov.uk/
and https://www.gov.uk/guidance/sign-up-your-business-for-making-tax-digital-for-income-tax
This article is taken from Landlord Today