£50,000 A Year Earners And Landlords Need To Get MTD Ready
New Making Tax Digital (MTD) rules coming into force in April mean around 850,000 landlords and self-employed people earning more than £50,000 a year, which would be declared on their 2024/25 tax return, are required to register for MTD by April 6, 2026, if they haven’t done so already.
The new rules mean taxpayers must give HMRC records of self-employment and property income and expenses every quarter, rather than once a year. But they still only pay their tax bill once a year as they do now.
The quarterly submission deadlines are August 7, November 7, February 7, and May 7, with a requirement to submit a final tax declaration by January 31 of the following year, in the same way someone would approach a self-assessment submission now.
However, this final declaration, within which any adjustments to the records can be made, will replace the annual self-assessment return for those affected.
Why doesn’t everyone have to sign up in April?
HMRC is getting people signed up to MTD over time. While landlords and self-employed people, or sole traders, earning over £50,000 of qualifying income must join from April 6, those with qualifying income of £30,000 or more will join from April 2027, and those earning £20,000 or more of qualifying income will be required to join from April 2028.
By that final date, around three million people will have to send quarterly reports to HMRC through MTD for income tax. These taxpayers will have to submit their tax information to HMRC by using compatible and approved software packages, as HMRC does not provide this software. You can find
out more about approved software packages at Gov.uk.
If you don’t comply with the rules of the new regime, you will accumulate points and eventually could receive an automatic £200 fine. You will get points for late filing and/or late payment. The points will stay on your account for two years, and after this they will be removed. Any taxpayer can apply for a digital exemption if they believe they are digitally excluded.
Let us help you
If you think you might be affected by this change, then please get in touch with us and we will do what we can to help you.
