HMRC Issues Update for Income Taxpayers: New Mandatory Software Now in Effect

HMRC Issues Update for Income Taxpayers New Mandatory Software Now in Effect

HMRC (Her Majesty’s Revenue and Customs), the tax-paying authority of the UK government and this body is sending new information to all of the consumers that the government is going to allow more time for all landlords and self-employed ones for MTD (Making Tax Digital) by Income Tax Self Assessment (ITSA). If you are self-employed you are having a small-scale business or you are a landlord you have to register with HMRC and completely update the tax return of the year. Since 2015, the government was trying to make new changes with technology rather than upgrading Self Assessment Tax Returns. One of the main agendas of MTD is to keep all business records in digital format and up to date. So each and every business has to digitally track and update it to meet all MTD requirements.  Now the software is not directly provided by HMRC. But for sure there will be a third-party software provider to complete all the requirements. 

Due to the economic tensions and inflation around the country, time is needed for preparing MTD. And it could show tremendous changes in the life of landlords and self-employed entrepreneurs. And according to the HMRC authority, they are looking for the complete usage of these tax pairs by April 2026 only and as of now there is no need to prepare this assessment, and the use of new software is not needed for the coming April 2024.

Confidential sources say, MTD software is expecting landlords, and single-scale entrepreneurs to update their income and expenditure quarterly if they can achieve an income of more than 50000 pounds from April 2026. In the case of landlords who have an income of 30000 pounds and 50000 pounds, they could have updated all details in the software from April of 2027. Also, it is only for traders or landlords who have a gross income of more than 10000 pounds. 

HMRC Issues Update for Income Taxpayers New Mandatory Software Now in Effect

Jim Harra, chief executive at HMRC said about this, “HMRC remains committed to the delivery of MTD as a critical part of our strategy for digitalizing and modernizing the tax system, but we want to make sure we get this right and deliver it effectively. A phased approach to mandating MTD for income tax will allow us to work together with our partners to make sure that our self-employed and landlord customers can make the most of the opportunities this will bring.” And according to  Victoria Atkins, financial secretary to the treasury said that this is one of the crucial times for maximizing all possible differences for small-scale entrepreneurs and landlords who are contributing to the economy. Also, she was ensuring the software could work with every taxpayer, tax agent, software developer, etc. Moreover, it will help the visibility of cash flow in the economy and give awareness to all landlords and business people.

But there are some tensions are arising for those landlords and entrepreneurs who have businesses in remote areas and quarterly updates could not be done for those who are senior citizens or have any disabilities etc. The government needs to find solutions for such cases and offer support, If you want to know whether this is mandatory for you, you have to check the gross income and if it is more than 10000 pounds, you must register with the HMRC. But there is no need to worry about generating these digital documents because most of them are self generator through software assessments. That means lesser work than you should self-assessment process. It is a little longer  task in the initial stage maybe, but, definitely eases the work in the future. 

Also Read UK Banks Offer Lending on Flats with Cladding: Six Major Institutions Take the Lead

Julie Ros
Written by

Julie Ros

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *