Making Tax Digital for income tax – Take action now!

Many businesses have already had to grapple with the complexities of the initial phase of MTD for VAT since April 2019.

This requires businesses to record and submit their tax information digitally each quarter using HMRC-compliant software, including many of the latest cloud accounting packages we offer.

However, the next phase – MTD for income tax – will affect many more individuals across the UK, who have relatively little experience of reporting tax on such a regular basis using digital systems.

This new stage of the digital tax regime will be mandatory for some self-employed workers and taxpayers with income from property, such as landlords, with business income over £10,000.

General partnerships will also be required to follow these rules from April 2025, following by other partnerships at a date that is yet to be confirmed.

 

Time to Prepare

Although the deadline to prepare for this fundamental change to personal income taxation may seem distant, experience from earlier phases of MTD suggests that individuals should begin preparing now.

Those affected by these new rules from 2024 need to have the right systems and processes in place to report and record their tax affairs compliantly.

At Knights Lowe, we have spent several years supporting businesses with the implementation of MTD, including offering advice on software that is suited to their needs.