Latest incoming changes to Income Tax Self Assessment
Making Tax Digital (MTD) for Income Tax Self Assessment will become mandatory from April 2024.
All businesses with annual income from self-employment or property above £10,000 will have to follow Making Tax Digital rules from this date.
HMRC are still running pilot schemes, but what you can you expect from these new tax rules?
Firstly, as with MTD for VAT, you will need to use software that is compatible with MTD for Income Tax. It is likely that most standard bookkeeping software will meet this criteria by the time the rules are in place.
The big change is that you will likely need to submit quarterly updates for business income and expenses.
This will be a significant change for any business owners preparing accounts and tax returns 6-12 months after their year end.
The coming changes make it even more important to be on top of your bookkeeping, as you will need to ensure all records are up to date and any accounting adjustments have been made for each submission.
There will be an end-of-period statement and final declaration to make each year, but for farming businesses in particular, seasonal fluctuations in business performance could have a real impact on these quarterly submissions.
With just under 2 years to go, now is the time for business owners to be looking at their software and getting their record keeping in line and ready for these changes.
Speak to Roake & Cook about out Xero migration service if you’re behind on MTD requirements. We can also assist with the day-to-day running of your Xero accounting, offering services such as bookkeeping and year end accounts preparation, as well as tax consultancy.