Our friends at BTC Software have created this useful infographic to help you understand what Making Tax Digital for Income Tax Self Assessment means for you.
It addresses seven frequently asked questions about the new initiative from HMRC.
What is Making Tax Digital for Income Tax Self Assessment?
- What is MTD for ITSA?
ITSA: Income Tax Self-Assessment. A digital initiative from HMRC that requires electronic record keeping and digital submission of statements and tax returns.
- Who is affected?
Individuals who are subject to income tax on the profits of their trade, profession, vocation or property
- What do I have to do?
In brief: keep your accounting records electronically and send quarterly updates to HMRC.
- Will payments change too?
The current system of payment on account and balancing payment by 31st January is not earmarked for change.
- When do I have to sign up?
MTD for ITSA will be mandatory from April 2023 for unincorporated businesses and landlords with a gross
income above £10,000.
- What about partnerships and trusts?
If your partnership or trust has business or property income, you will also join from April 2023.
- Why’s this being introduced?
HMRC’s MTD initiative aims to reduce errors, costs and help businesses keep on top of their tax.