You may find a brown letter from HM Revenue & Customs (HMRC) dropping onto your doormat soon, with details of the soon-to-be-mandatory MTD for ITSA.
But what is ‘MTD for ITSA’ and why do you need to know about it?
Making Tax Digital for Income Tax and Self Assessment (or MTD for ITSA) is part of HMRC’s ongoing initiative to convert the UK tax return process over to a digital system.
If you’re a sole trader or landlord, you’ll soon need to:
Landlords and sole traders who fall into the following categories will soon find it’s mandatory to use the MTD for ITSA system.
From April 2025, HMRC will be starting a campaign to raise awareness of the looming deadline to become compliant with the MTD for ITSA rules.
This will be kickstarted with an official HMRC brown envelope being sent to sole traders and landlords with a total self-employment and/or property income of over £50,000.
You’ll receive a letter if your 2023 to 2024 self assessment tax return shows your total income (turnover, not profit) as being either over, or close, to £50,000.
An official letter from HMRC can sometimes be cause for concern. But there’s no need to worry unduly about MTD for ITSA. The mandatory deadline for compliance is still a year away, so there’s plenty of time to update your systems and get yourself compliant.
Call us on on 01904 787 973 and we’ll explain the implications of MTD for ITSA, the need for digital records and how to get compatible cloud accounting software up and running.
If you’d like to improve your company’s financial performance, or don’t feel you’re getting enough support from your current accountant, book your free discovery call with us today.
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