How self-employed individuals and landlords can prepare for Making Tax Digital (MTD)

From April 2024, all self-employed individuals and landlords will be required to make UK tax submissions quarterly under the new Making Tax Digital (MTD) rules.

Under these rules, self-employed individuals and landlords will be required to operate MTD in relation to any business and/or property income where gross income from these sources in a tax year exceeds £10,000.

This means, instead of making one submission on or before 31 January following the end of a tax year (as we are accustomed to), submissions will now have to be made in real time every three months, in addition to a final 31 January tax return filing.

A total of five submissions will therefore need to made to HMRC in respect of each tax year - one on every tax year quarter, plus a final submission before 31 January following the end of the tax year.

The idea behind these changes is to cut down on filing errors, allow tax liabilities to be paid in real time with each submission, and provide individuals with a more accurate and up to date reflection of their own business finances.

To overcome this challenge, Bearstone have officially Partnered with Xero, a software provider that will allow submissions to HMRC to take place in real time with the ability to connect bank feeds to the interface directly. This will allow us to provide our clients with a smooth transition to the new filing system, while pointing out any planning opportunities in real time during the tax year (instead of after it has already ended).

To discuss any of these changes or to find out how Bearstone can help you with the transition, contact us at enquiries@bearstone.co.uk