The new MDT regulations have now been published.  To summarise:

Once you have reached your digital start date you have to continue to keep digital records and file these quarterly, regardless of turnover.  Transactions need only be recorded with enough information to meet the quarterly deadline.

Recording Cash or Accruals?  The regulations state that digital records must use the same basis as the intended tax return:  “..the dates of the transactions, according to the basis used by the relevant person for recording transactions for the purposes of income tax.”

The regulations confirm that, irrespective of your financial accounting period, all individuals must provide quarterly updates based on the tax year, unless a calendar year basis is chosen instead.

Quarterly updates can be submitted early, within 10 days of the end of that accounting period, providing no more transactions are expected after the submission date and the end of the period.

Property: there is a ‘Specified Information’ section which legislates for the provision of additional information identifying all properties within a portfolio.  This is unspecific but presumably means the address of each property.

 

Making Tax Digital for Income Tax Self-Assessment (the MTD for ITSA programme)

It is believed that this programme will once again be delayed, possibly until 2024.  The government recognises that the challenges faced by many businesses as the country comes out of the pandemic.  In recognition of this the programme will be introduced for individual businesses and property landlords in the tax year beginning April 2024.

In addition, partnerships will not be required to join MTD for ITSA until the tax year beginning in April 2025.  The date at which all other types of partnerships will be required to join is yet to be confirmed.

We are still unsure about where this leaves MTD for Corporation Tax, but we will inform you as soon as we know.

 

If you have any questions or require clarification please call our team on 01803 500 500 and we will be delighted to talk to you.