Are you ready for the switch to digital tax submissions?

Are you ready for the switch to digital tax submissions?

The Making Tax Digital initiative (MTD) is a HMRC scheme that aims to modernise income tax accounting and reporting, making the process fully digital. The idea is to improve HMRC’s efficiency and reduce costs to the taxpayer by processing business, property and individual tax affairs on-line.

Under Making Tax Digital Income Tax Self Assessment (MTD-ITSA) landlord taxpayers will be obliged to submit quarterly up-dates instead of just one annual tax return, traditionally due by 31st January following the end of the previous tax year ending 5 April.

In addition to the quarterly returns there’s also required an “end-of-period statement” (EPOS) submitted to HMRC as before by 31 January following the end of the financial year. This will confirm that the data entered in the quarters was accurate, adjusted if necessary.

Other issues such as expenses that landlords can claim and the restriction of mortgage interest, as well as any other taxable income will be taken into account before submitting a “finalisation statement”, a declaration to confirm and take account of any final “updates” needed to calculate an accurate final tax bill.

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