Making Tax Digital (MTD) for Income Tax will be in place by April 2024 which means that property owners are required to digitally report property and self-employment income to HMRC through MTD compatible software. This blog will outline four things property owners need to know about the changes.
Only individual property owners will be required to begin submitting their income tax returns through MTD-compatible software from April 2024. For property owners who have their property portfolio in a limited company, the changes will not apply to them until 2026 at the earliest.
By April 2024, property owners with an estimated income of £10,000 or more from a property portfolio will be required to start filing their returns detailing income and expenses, digitally – and quarterly, on top of the end of year statement. This means that property owners will not only be submitting one tax return per year and instead they will be having to submit four additional filings.
By April 2024, if a property owner misses the deadline for submitting tax returns, then they will receive one penalty point for every missed deadline. After a specific number of penalty points (also known as the ‘points threshold’), you will be required to pay a fee of £200. The penalty points expire after two years.
To ensure that MTD rules are applied fairly, the government has announced that individual taxpayers who are not able to deal with digital tax returns due to genuine circumstances will be exempt. Property owners wishing to seek an exemption will be required to apply through the HMRC website.
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