MAKING TAX DIGITAL FOR INCOME TAX - 5+ TAX RETURNS A YEAR?
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- Опубликовано: 6 сен 2024
- The ‘death of the tax return’ was the announcement in 2015. We are now seeing what that actually mean’t…
For the self employed and landlords receiving more than £10,000 a year, from April 2024 they will have complete 5+ returns a year to HMRC on their income.
Dan runs you through these changes
Topics include:
Income Tax
Making Tax Digital for income Tax (ITSA)
Making Tax Digital for VAT
MTD
MTD Software
MTD Free Software
Making tax Digital spreadsheets
Making Tax Digital Quickbooks Xero
Making Tax Digital Landlords
Making Tax Digital Self Assessment
Self Assessment Tax Return
End of Period Statements
Final Declaration
… and more!
If you have any questions on this, please comment below.
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#accounting #selfassessment #MTD
I'm a sole trader and finding out about stuff I need to do sometimes is overwhelming, but now considering those changes I will just make a weed plantation somewhere up North, cheers
I did enjoy this comment :- ) Don't worry through, its all manageable with the right help!
The war on the self employed!! Not gunna be much point being self employed anyore
Luckily this has been delayed again for a couple of years . .
Well that’s made my mind up. I was going to start a business but now I'll apply to HMRC for a job checking tax returns. Honestly, you couldn't make it up in this country at the moment. It's all going down the gurgler
It's certainly going to add a burden to small business. HMRC commissioned research on the less onerous Making Tax Digital for VAT and that study didn't prove great benefits: assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/968418/HMRC_research_report_605_-_Exploring_the_costs_and_benefits_of_MTD_for_VAT.pdf
Just getting to grips with tax returns for my self employed daughter. But then again, a change of govt could change everything!
Good news HMRC have extended MTD. For businesses that make £30-£50k it's now April 2027 and April 2026 for £50k a year however they are reviewing businesses that earn below £30k. So up to now MTD postponed from April 2024 (I have a feeling they may not make it mandatory for £30k and below)
Yes will have a video updating this soon! Some relief for short term...
Gonna be an absolute headache, what with vat quarterly and tax the self employed will struggle to find time to make any money. These people are truly evil! And Specislist software we will end up paying for. Makes me sick!
Its certainly going to be a large admin burden, many business groups have been saying this for years, but they are set of doing it anyway.
My income is split from being employed and self employed, I will meet the £10,000+ category for my self employed business, so I know I will have to do the MTD but I will be interested in how it will work with both incomes. Great video! thank you for the information. I feel for a lot of people that will find this a headache, I do a few self-assessments for self-employed construction workers and they will find this a struggle doing this themselves!
Oh for sure. Even better is none of the software providers (due to hmrc) currently can handle CIS deductions so will be a little wait to see what to do for those subbies 😃
Destroy the small businesses..and destroy accountant's.. welcome to surveillance under the guise of helping the business owner .
It certainly hasn’t received a warm welcome by any party!
Forget starting a business then. I don't have an accountant because I can't afford one. My accounts are simple enough for me to struggle through myself. I have company accounts, and my self-assessment for multiple other income streams, shares etc. I already have 3 sets of accounts to do. It's been a hell of a hurdle to overcome. This would literally translate to dozens of accounts to file each year. Plus vat returns at some point. A lot of people won't be able to afford to pay their accountants for the multiplied workload.
For sure Mike, it's a big headache for all involved. Luckily they've now added another 2 years to the wait....
Personally I'd prefer doing it quarterly, I'm terrible with organisation so it'll help me keep everything in line and not have a huge bill I haven't prepared for
This is what HMRC are shooting for, they are hoping there are owners who feel like you, and you certainly won't be a alone.
Interesting as a non resident HMRC don't allow you to submit anything digitally, unless it's through a 3rd party. I've spent so many hours trying to go digital, after repeated correspondence suggesting that I do, to finally find out after 8 years that you can't. How does HMRC intend to cater for people like me? Bet they haven't even thought of it.
Yes Howard I expect there will be these roadblocks as well! A lot of non resi can't pass the online security....
Hi Dan, aree there any more updates about MTD that you can share with us in 2024, as April looms closer?
Hey, luckily they pushed the date again now April 2026, and they’ve changed the criteria slightly. Will defo do another video as we get closer.
My rental income is around 5k per year. I'm employed, not self employed. I'm assuming i just fill a self assessment form in annually as before even though my employed income takes me over 10k.
That’s the most likely outcome, although it’s still all in flux now about who will need to report when under this system.
Sorry to jump on this video with this question, I heard you mention a 25% rule on a previous video. Taking into consideration NI wouldn’t you want to set aside 30% of earnings
Based on earning 30k from employment already
It’s a rough calc based on average bill and the timing of when you’d need to pay it, so it’s not a perfect fit for all circumstances. Example if you are a higher rate tax payer you’d want more, so do whatever feels best.
The main idea of the other video is to get people in mindset of putting something aside.
The 25% takes into account personal tax/ni free allowances etc in its rough calc.
There’s a really easy app called coconut that makes it so much easier for tax especially for landlords and self employed.
We might look at this for a video...
That system sounds very tiring, which already happens with VAT honestly.
I have a question for a specific case. If I own a company and Im an employeee of the company, am I self employed? I believe the answer is no
Correct, for a tax point of view. These new rules will come for companies, but a couple of years later.
@@HeelanAssociates one more question sorry. The threshold of 10k, is it per year, meaning the threshold resets to 0 at the start of the next tax year, or is it when it reaches 10k you'd be in the system for the present and future tax years after that. Like the VAT system basically
@@detweiler **currently** its if you had over £10k in the last tax year you'd enter system in the following year, depending on timing. Once you are over, you can't come out of system unless you go under 3 years in a row.
Omggg I'm doing this for the first time this makes me so stressed I'm struggling understanding all this
Luckily this change has been delayed 2 extra years and they are looking to change the limits.... what we will end up with no one is sure!
Have I read this correctly on HMRC website?? MTD for self assessment has changed from 2026 if you earn £50000+ you need to do a digital tax return & from 2027 those earning £30000+ will have to do the same?? If so is this figure Gross or Nett?? Thank you
This figure is planning to be gross (based on turnover), but so much keeps changing who knows where it will end up!
First of all thanks for the great video and apologies for my long winded comment.
I've been self employed for many years and recently was forced into doing my own tax returns due to my accountant retiring. As I was working less and less year after year I found it relatively simple. I was already doing my own VAT returns and was well under the threshold for VAT. So when the MTD for VAT system came in it was far easier for me to de-register for VAT than to start using the new system (even though I had to pay money back to HMRC). Now it's coming in for SA returns I am seriously considering lowering my workload to get my turnover below the £10,000 threshold. My question is how will I submit my Self Assessment retun if my turnover is less than £10,000 a year.
Hi Martin glad you enjoy the vids.
We don’t currently know 100% but from what we can see the existing system will stay for those not under the mtd system.
The trick will be have under £10k the year before it goes live because under current proposals they decide if your in based on previous tax year. This would mean on current plans this tax year really.
Otherwise you need to be in the system for a few years before you can come out.
@@HeelanAssociates Thanks for the reply it's very much appreciated 👍
Government have lost there mind will just cost us more for paying for 4 tax admins a year instead of 1
Well good news, big delay and change the thresholds announced!
Hi
What if your ltd co is an spv for property rentals? How’s that classed? Landlord, there fore April 2024 or ltd co therefore a few years to roll as yet.
Thankyou
Ltd co rules, so few years away
I’m not just saying this because I’m invested in coconut, but, accountants need to check out coconut, it’s the perfect software for you and your clients.
Its something we have down to download and play with, because on the surface level it appears like many apps - will work in very simple circumstances but we would want to investigate the reporting and 3rd parties integrations.
Maybe well be another MTD solution there thought; think the market will be flooded with them, because may people will only need simple solutions.
Will it be like a mini tax return that i fill in online, like the current SA? Also how do i claim work from home on a cash basis self assessment
?
Still info coming out, but the 4 will be 'submissions' auto filled from your software. 1 at end of year will likely look like a self assessment but we don't know 100% yet some of the detail.
@@HeelanAssociates will you have to use software, i use an excel spreadsheet and not software
@@pynk1887 yep you will. Many players entering the market for it now. I recommend coconut, check them out, speak to your accountant about using coconut.
@@DharmeshParmar2510 I don't have an accountant i work on a cash basis and excel spreadsheets
Good god... I don't envy your job!
The accounting profession are struggling to come to terms with what this means for everyone involved that's for sure!
Same as in Spain.
Interesting - is the system live? If so, how has it been recieved?
@@HeelanAssociates I believe it has been that way for some years. I have a rental property and have to submit 4 times a year. Unfortunately after Brexit there are now no deductibles. The difference being that you also pay the tax due at the end of that quarter also. I can imagine the UK moving to that also as it means HMRC gets their money in sooner. As for how has it been received? In Spain you do as you're told or suffer the consequences. They can fine you whatever they want. They aren't as tolerant as HMRC surprisingly!
I don't see how 5 returns a year makes things easier?? 🤔
you didn't mention the penalties for late returns, 4% on the tax you owe up to 31 days late and a £200 fine there after.
Torys need to go!!!
My work load will plumit,
There is no incentive to work anymore ide be better off with nothing!
Interestingly the government have commissioned a study on why people don't work as there is a lot of people statically that appear could work, but aren't. Makes you wonder if things like this impact those stats...
For VAT ONLY OR ?
Vat has its own making tax digital system, so this is for everyone earning over 10k self employed/ property.
www.heelanassociates.co.uk/making-tax-digital-your-basics-guide/
@@HeelanAssociates this is unbearable
Unacceptable
What a total farce. 5 returns a year + 4 VAT ye gods.
Going to be a massive shift and a challenging time for many owners.
I’ve just read that if your income is 10000 or less then you can carry on with normal self assessment I have a holiday let so if the gross is 14000 and I deduct my allowances etc and leaves me with 10000 or less do I still have to go digital or carry on as normal thanks for any replies
its £10000 gross earnings so you will have to use MTD
@@michaelh9042 thanks that’s a pain for 10k
As Michael says sadly its gross under the current plans.
Good news HMRC have extended it to 2027 for businesses that make £30-£50k, 2026 for £50k a year however they are reviewing businesses that earn below £30k (I have a feeling they may not make it mandatory for £30k and below)
@@michaelh9042 thanks for posting this