What is MTD For ITSA?
MTD for ITSA was planned to be introduced in April 2024, it will now be phased in from April 2026. Self-employed individuals and landlords with an income above £50,000 will be required to keep digital records using compatible software.
The rules will require the following on compatible software (all of the software we use is MTD compatible):
managing
tracking
sending quarterly updates of business income and expenditure to HMRC
end-of-year summary updates of business income and expenditure to HMRC
Whilst this is a big change for some, using accounting software provides real time record keeping so you are able to monitor your financial position easier and make any business or personal decisions based on accurate information. It will also benefit you knowing your tax position sooner and allow you to plan for your tax payment in advance.
Why Start Now?
Despite the delay, we recommend moving over to compatible software as soon as possible, there are many benefits to keeping digital records: being able to see your financial information in real time meaning accurate planning and budgeting decisions, save time uploading paperwork immediately and avoid having to file through invoices and receipts.
Starting early will ensure any problems are resolved before the live date and ease you in to a new way of working rather than a last minute rush. This means you chose the software that works for you and is within your budget.
Advantages
- Reduces avoidable errors in business records
- Reduce the risk of errors due to lost or incorrectly recorded invoices
- Accepting payments online, direct from your invoice benefits your cash flow (providing you invoice from the software and use an add on payment service*)
- Plan your future with more accurate financial information
- Produce real time financial reports
- Share your records with your bookkeeper easier
- Less paperwork to find and worry about
- Speeds up your bookkeeping
*fees apply
In Depth
At the end of the year, they can add any non-business information and finalise their tax affairs using MTD compatible software. This replaces the need for a Self Assessment tax return.
The deadlines the year end summary and payments your tax are staying the same.
The timing of the quarterly updates is determined by the beginning of the tax year:
- 6th April to 5th July
- 6th July to 5th October
- 6th October to 5th January
- 6th January to 5th April
How We Can Help
For more information, you can contact us in a number of ways:
Click here to be re directed to our web contact form
Call or Whats App: 01865 522785
E mail: info@cashtrak.co.uk
Facebook: @Cashtrak1, Instagram: @Cashtrak_Bookkeeping, Twitter: @CashtrakCarol
We already have a number of clients on compatible software that don't yet have to be following the MTD rules. As your agent, we will discuss with you your budget and needs and go through the compatible software then find out ow involved you would like to be with the information, we can manage everything for you or find a balance depending on what you want and your budget. We then:
- Sign you up for MTD
- Set you up on the compatible software of your choice
- Provide training on the software and what is needed from you
- Submit or remind you to submit the quarterly information to HMRC
- Work with you at year end to direct you to the information HMRC needs
- Advise you of your tax liability
Q. I have more than 1 business but none of them have an income of £10,000?
Q. Can I start before the deadline?
A. If the total income from ALL businesses exceeds the threshold of £10,00 you must follow the MTD for ITSA rules.
A. There is a pilot running that can be joined (subject to eligibility), you can leave at any time click here for more information.
Any questions? Please use our form to submit your question and we will add to our FAQs.