Making Tax Digital (MTD) updatecreative77
Following on from our MTD Workshop in November, the treasury made an unexcepted announcement in December that they have decided to delay the rollout of MTD for sole traders, partnerships and landlords.
Before this announcement, any sole trader or landlord with a total gross income of over £10,000 would have needed to keep their financial records digitally and send a quarterly summary of their business income and expenses to HMRC using MTD-compatible software. We organised our workshop to support our clients with this transition and make it as smooth as possible.
However, HMRC seemingly realised that their software development was so delayed that the original plans for MTD for sole traders, partnerships and landlords were just not possible to carry on with. This is probably a good thing as if the software and infrastructure is not ready then this would have caused us all a headache!
What has changed:
- The go live date has been delayed by 2 years so now takes effect from April 2026 instead of April 2024.
- The threshold to fall into the scheme has also been raised to individuals with more than £50,000 of gross income who are a sole trader or landlord.
- Individuals with between £30,000 and £50,000 of gross income will be added into the scheme from April 2027.
- Partnerships are now not part of the current rollout of MTD, but HMRC has stated it is committed to bringing them into the scheme in the future.
- There were no communications about the basis period reforms which were part of the original roll out of MTD for sole traders, partnerships and landlords.
What do you need to do now?
As mentioned above, keeping your records securely and digitally is still a good thing to do and we still recommend the following:
- Having separate bank accounts for your business, property and personal expenditure
- Use a cloud-based accounting system to keep track of your business and property related expenses.
We will keep you posted as any further news and updates follow.