A significant shift in how landlords file tax returns is looming on the horizon. Here’s what landlords need to know about the changes.
If you’re a landlord with a taxable income of more than £10,000, now’s the time to start thinking about new tax reporting rules that are coming down the line.
In April 2024, all landlords with an income of over £10K will have to comply with a scheme called Making Tax Digital (MTD).
While that deadline is 18 months away, it will come around quickly enough. It’s worth making plans now so that you can transition to MTD without any last-minute panic or getting on the wrong side of our good friends at HMRC.
Here’s a rundown of what MTD is and what it means for landlords.
MTD is a digital tax filing system which HMRC claims will make things easier and more efficient.
Larger businesses that claim VAT already comply with MTD, and in 2024, self-employed business owners and landlords will also be required to come on board.
Under MTD, people who self-assess, such as landlords, will be required to keep digital records of all income and expenses. They’ll have to send HMRC quarterly income and expenditure updates and file an End of Period Statement using approved third-party software.
Who will be most affected?
If you already use software to keep track of all your property-related admin, the changes won’t be such a big leap for you as you’re already tech savvy.
But if you’re someone who typically scrambles at the last minute to meet your tax deadline, and relies heavily on old-fashioned paper copies of receipts, then you’ll have to adapt.
If you fall into the latter category, it’s worth doing your homework on MTD now. This will give you time to get the right software and familiarise yourself with how to use it.
Tips and important considerations
This article is intended to provide general advice only. Always consult an accountant for advice and guidance specific to your situation. For more information, contact us here at Village Properties.
Village Properties is a trading name of Village Properties (South West) Limited, Registered in England Number 6480700. Registered Office 57 Sheen Lane, London, SW14 8AB