Do you rent out property? Are you registered for VAT? Then look out for MTD.
WHAT is MTD?
Making Tax Digital (MTD) is the Government’s plan to transform the current tax system into a fully digital service. And landlords are among the first to be affected.
WHEN is MTD happening and what will landlords have to do?
From April 2019, incorporated landlords with income over £85,000 will be expected to keep digital records for VAT purposes. You’ll also have to submit your VAT return to HMRC through MTD compatible software which will pull information from the digital records. HMRC will provide a list of approved suppliers, including Intuit QuickBooks, of course. In fact, we’re working with them right now to make sure we offer our customers the smoothest experience possible.
WHO else will be affected by MTD?
Unincorporated landlords and small businesses with an annual turnover between £10,000-£85,000 will also be required to join at the income/corporation tax phase which is likely to be April 2020. At this stage you’ll need to:
- Keep digital records detailing, dates, rental values, income and expenses.
- Send quarterly reports to HMRC using third party software, summarising your business’s income, expenditure and profits.
- Make an end of year declaration (after any necessary adjustments).
All of this will be done through your personal tax account which will securely store all of your tax records.roperty is owned by a partnership, submissions will be made to the business’s digital tax account by a nominated partner. In a jointly owned property, each individual who receives income will report it separately.
WHY MTD is good news
Change is always a challenge, but in the long run, Making Tax Digital should be a positive experience for landlords and other small business owners.
- An end to manual submissions means fewer mistakes and serious time savings.
- Quarterly reports will show you how much you owe in real time.
- You’ll have a single picture of your liabilities and entitlements through your personal tax file.
HOW QuickBooks can help
QuickBooks are working with HMRC to make sure our user-friendly software is fully compatible with MTD requirements. If you’re already a QuickBooks Online user the change should be effortless. All the details of your income and expenses will already be uploaded, categorised and securely in the cloud, ready to be pulled onto your personal digital account.
Find out more about how QuickBooks could help you prepare for MTD and download our free guide for small businesses.