HMRC releases more details MTD for Income Tax
Further details have been published by HMRC on how Making Tax Digital for Income Tax (MTD for IT) is going to work for any buy-to-let landlords and sole traders who have a qualifying income over £10,000.
The new income tax framework for MTD for IT is going to become mandatory from the 6th of April 2024, so HMRC is asking for users to sign up for the test phase.
“For those who qualify for MTD for IT, the new system is going to replace the self-assessment tax returns. You will have to submit all non-qualifying income through the Personal Tax Account system instead!” – Amy Telford, HTB
Those who qualify will then have to make quarterly submissions, with the new deadline for end of year statement being the 31st of January after the end of each tax year.
HMRC will use data from the self-assessment tax returns to calculate the qualifying income in the first instance, they will then contact all affected taxpayers directly to inform them that they fall under the mandatory MTD for IT rules.
“All of your qualifying income must be reported through MTD compatible software. All other sources of income reported through self-assessment, such as income from employment, dividends, or savings, do not count towards your qualifying income. You will need to report income from these sources using either your MTD compatible software (if it has the functionality) or HMRC online services account.”