With the majority of small businesses now registered for MTD for VAT, it is now time to start preparing for the introduction of MTD for Income Tax.
In light of the Covid pandemic the planned start date has been pushed back from 2023 to April 2024. This may seem some way away but 4.2 million taxpayers will need to sign up ahead of the deadline so it makes sense to start planning now.
Under MTD for ITSA rules, self-employed people and landlords earning above £10,000 will need to submit quarterly updates, one End of Period Statement (EOPS) and a Final Declaration each tax year. To do this, they'll need MTD compatible software for record-keeping and sending updates to HMRC.
Xero are already testing their MTD for ITSA solution with select customers as part of HMRC's pilot. Their fully tested end-to-end solution will be ready well ahead of the 2024 deadline so if you are currently use Xero accounting software you can be confident that when the time comes to sign up, everything will be in place.
However, many of the 4.2 million tax payers do not currently use accounting software and the prospect of switching may seem daunting. Here at The Accounts Place we are passionate about helping clients reap the benefits of using Xero software and Xero Add-ons. Whether you need help getting started or with regular bookkeeping and reporting, we can help.