The MTD deadline of April 2023 is looming for the start date for landlords and other property investors to report tax quarterly under the new system. From this date anyone whose gross rental receipts exceed £10,000 from property should get ready to start recording and filing online.
It is not just a case of switching over to the online system, you will need to sign up to software which aligns with HMRC’s online process. You will no longer have to send in a self-assessment tax return (providing you don’t earn income outside of scope of MTD for landlords), however you will be required to complete a year-end declaration.
Once you have chosen your digital software and started using it, it should make life and record keeping a lot easier. You will be able to update your income and expense on the go by using a mobile app. Keeping records updated on the go will mean less chance of missed expenses and lost receipts… not to mention hours saved at the dreaded year end.
Each quarter you will report your income and expenses via the software to HMRC. You can do this more often if you wish. Providing you are keeping your records up to date as you go it could be as simple as clicking a button. By January 31, following the end of the tax year you must use the software to provide HMRC with and End of Period Statement, Final Declaration of Income, and you will need to pay the balance given.
If you are a landlord with multiple properties held within a property business, income and expenditure only has to be recorded for the business as a whole and does not have to be allocated to individual properties.
The result is very similar to now ‒ MTD won’t change what you need to pay or when you need to pay it.
- Use MTD software
- Keep digital records
- Submit account summaries once a quarter to HMRC
If you have any questions regarding the process, then please contact the team in the office.