MTD for ITSA - Rules for landlords and business owners

MTD for ITSA – New Self-Assessment rules for business owners and landlords

Self-employed business owners and landlords will soon need to comply with MTD (Making Tax Digital) when they submit their tax return. The new system is being implemented in 2024 and is known “Making Tax Digital for Income Tax Self Assessment” (MTD for ITSA).

From April 2024, all sole traders, partnerships and landlords with a total business or property income above £10,000 per year, will have to comply with MTD for ITSA.

To comply with MTD for ITSA taxpayers will need to do the following:

Register for MTD for ITSA on the HMRC website;
Switch from paper to digital business records only;
Use MTD-compatible accounting software for their accounts e.g., FreeAgent, Xero, QuickBooks;
Submit quarterly business income and expenses updates to HMRC through their software;
Finalise the business’s income in a declaration which confirms that the updates sent are correct, and make any accounting adjustments;
Submit the final declaration to HMRC. This will replace the annual self-assessment tax return.

Instead of sending a self-assessment tax return to HMRC once a year; under MTD for ITSA, business owners and landlords will submit a quarterly summary update of their income and expenditure, with a final declaration at the end of the year. It will operate like the current VAT regime.

The quarterly summaries will need to be submitted in line with the businesses’ accounting periods. For example, if accounting periods match the tax year, the four quarters will be:

6th April to 5th July
6th July to 5th October
6th October to 5th January
6th January to 5th April.

MTD for ITSA also requires a “final declaration” to be made to confirm the overall tax position at each year-end. This should include details about personal income and tax reliefs and include an End of Period Statement (EOPS). The final declaration replaces the self-assessment tax return, although the deadline for submission will continue to 31 January.

If you have questions about MTD for ITSA or would like help with property tax, contact us via partners@rjp.co.uk.

How to get onboard with RJP

Talk to us

Have a free initial discussion with a member of the RJP team to identify ways we can enhance your business's growth with our comprehensive support and strategic advice.

Hassle-free migration

Choose RJP and we'll smoothly manage all transitions, handling paperwork, coordinating with your current accountant, and ensuring no deadlines are missed for a worry-free experience.

A pathway to growth

Finally, we will send you the required documents to sign and return, leaving you to continue leading your business, backed by our abundant, responsive advice and support.

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FAQs

At RJP, we understand that keeping a finger on the pulse of your business's health is crucial. That's why we offer management reporting services—think of them as a regular health check for your company. These insights show you the real-time performance of your business, helping you make informed decisions to nurture and grow your enterprise.

We love seeing your business flourish! Growth and improvement are at the heart of our practical advice. From the ins and outs of everyday operations to big-picture strategic moves, we're here to offer clear, actionable steps that can propel your business forward.

We know dealing with the issue of compliance and auditing can be less than thrilling. That's exactly why we're here—to handle the complex stuff so you don't have to. We offer comprehensive compliance services, ensuring everything is up-to-date without you having to wade through a sea of regulations.

Absolutely! There's a world of opportunity out there to support your business financially, and we're well-equipped to be your guide. We can help you understand and access HMRC’s tax relief schemes that are relevant to you and your business, making sure you're not missing out on any potential benefits.

When you need us, we're just a call or an email away—no question is too small or too large. We're known for our quick responses and our fixed fees mean you can reach out without worrying about unexpected costs. Plus, we always keep things simple and straight to the point. We're not just your accountants; we're part of your team, ready to support both your business and personal needs.

MTD for ITSA – New Self-Assessment rules for business owners and landlords