We’ve had false alarms from HMRC before but this time it looks as if they are serious.
Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) means that all self-employed people, small businesses and landlords (including sole traders) with annual turnover in excess of £10,000 will have to file income and expenses information every quarter from April 2023. Having set the date so far ahead, it is clear that HMRC expect to meet this timetable.
Existing VAT registered businesses that currently do not submit digital returns will be required to do so from April 2022.
Under the MTD for ITSA regime digital software will need to be used, except where businesses wish to continue to use spreadsheets. Such businesses will need to invest in bridging software to ensure filing remains digital. There are numerous software packages available and more are expected to be developed over time. HMRC say that free software will be available, but they will not be providing it. Most software packages will be provided on a monthly subscription. Free trials are currently offered with most packages, we would recommend either QuickBooks Online or Xero.
We at HW Fisher are already experienced in handling MTD for VAT and we will be providing a full MTD for ITSA service, preparing quarterly and annual filings for our clients.
If you have any queries, please speak to your usual HW Fisher contact.