Landlord Making Tax Digital
 
 
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What is Making Tax Digital for Landlords?
 
HMRC are introducing Making Tax Digital (MTD) for Landlords. The good news is that it has been delayed from April 2020 to April 2023.
 
No one knows yet how how MTD will work as HMRC has not announced its full intentions, but at this time it is most likely to be that:
1.
Landlords will have to submit letting accounts to the HMRC 5 times a year, 4 quarterly accounts and
one final account.
2.
The letting accounts will be submitted in one of 3 ways:
(a)
Using approved bridging software that will take required information from your spreadsheets and import it into on-line HMRC tax assessment forms.
(b)
You purchase and use approved propriety lettings accounts software and begin using this as your accounts. There is no indication on how easy this would be to use, it could be an unnecessary expense, and many would prefer to continue using spreadsheets.
(c)
Using an accountant which could cost you £300 to £500 per year.
   
Remember, HMRC requirements can change!
 
 
 
NEWS
 
Aug 2020

Making Tax Digital Roll Out Announced!
Includes income tax returns for all taxpayers who file income tax self-assessments
for business or property income over £10,000 annually from April 2023.
https://www.nrla.org.uk/blog/making-tax-digital-roll-out-announced-but-is-the-timing-right
 
Oct 2019

Whilst HMRC are making positive noises about the progress of MTD, those businesses which pay VAT had to start submitting quarterly returns this year. Of the one million businesses affected, nearly one quarter missed the 7 August 19 deadline to submit their first return.

Recognising that implementation was not as easy as advisors had told them, HMRC has even gone as far as to waive fines altogether for those who missed the 7 August deadline, as long as the VAT return was filed on time using the old HMRC portal, in favour of supporting those businesses who are doing their best to make the transition.

Despite not levying fines, HMRC did confirm that those who had failed to meet the deadline would ‘receive a letter telling them that they missed the deadline and asking them to take action’ and that ‘sanctions will remain possible in cases of deliberate non-compliance’.

What does this mean for landlords? The last published date for landlords to move onto the MTD scheme was April 2020 but unofficially, we have been hearing that this is not possible, simply because the relevant details of how it would all work would need to be published by now if accountant and software companies were to be ready in time. However, until it is officially changed, you do need to consider that sometime in the next year or two, you will need to submit quarterly tax returns.

Our advice is as follows:

1.
Wait until the date is clearly set and the details fully outlined.
2.
In the interim, do not switch to any ‘MTD-ready’ solutions as we cannot tell what is
MTD-ready until the details are confirmed.
3.
Do not change the way you do things just because of new tax requirements. If what you do today works well for you, you should look for a solution that allows you to carry on with maybe small changes rather than have to change your whole administration system.
 
To register your interest and to be kept informed of developments drop us an email here:
 
 
 
 
 
www.LandlordMTD.com   © 2019