MTD for landlords – everything you need to know
What is MTD for landlords? MTD stands for Making Tax Digital, a plan that came into effect back in 2019. This government-backed plan makes it easier for businesses to get their tax right, reducing tax loss due to avoidable mistakes. It requires VAT-registered businesses above the current turnover threshold of £85k, to replace manual or excel spreadsheets with this new process.
What is making Tax Digital?
The government is keen to make it easier for individuals and businesses to get their tax right and keep on top of their affairs. Although HMRC also has another agenda – to become one of the most digitally advanced tax administrations in the world. And by moving everything digital, the system will be more effective, and efficient – leaving less room for error.
Who is exempt from Making Tax Digital?
You will be able to apply for an exemption from using Making Tax Digital for Income Tax if you consider that you are digitally excluded. You can apply if:
- It’s not practical for you to use software to keep digital records or submit them — this may be due to your age, disability, location, or another reason
- You are a practicing member of a religious society (or order). Whose beliefs are incompatible with using electronic communications or keeping electronic records
MTD for income tax purposes
MTD for Income Tax Self-Assessment was due to take effect in April 2023. It would have affected more than four million self-employed people and landlords with business/property income above £10,000. However, Making Tax Digital for Income Tax has been postponed until April 2024. And, because of the delayed MTD for Income Tax, the new penalty point system has also been postponed to 2024.
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