HM Revenue Customers (HRMC) has announced that the deadline for Making Tax Digital for a raft of businesses including landlords will now be April 2024 as opposed to April 2023.
Until the announcement by HMRC any landlord that makes more than £10,000 a year from rental properties – rental income not profit – would have needed to sign up for Making Tax Digital by April 2023. Landlords can join the scheme voluntarily any time.
Angus Stewart, chief executive of online buy-to-let mortgage broker, Property Master, said: “Our landlord customers will be breathing a sigh of relief to hear that they will now have an extra year to prepare for the new Making Tax Digital regime. For a typical landlord Making Tax Digital will move them from making one tax submission a year to having to file five – one every quarter and one at the end. The new deadline of April 2024 instead of 2023 will be some respite.
“Our advice though to landlords is to use this time wisely. Begin by keeping good income and expenditure records every quarter from now if you don’t already do this and think about sourcing software that can help. Our fear is that Making Tax Digital will have passed many landlords by as an issue they need to prepare for not just in terms of the additional time it will take but resources in the form of software and possibly the added support of an accountant.”
Under Making Tax Digital, landlords will need to send HMRC quarterly updates of their income and expenses. At the end of the year, instead of sending in a self-assessment tax forma landlord will sign a declaration that their quarterly returns are accurate. They will then have until 31 January the following year to pay their tax, as usual.
Landlords will have up to a month after the end of every quarter to send in their MTD information. A declaration that the filings are correct must be signed by 31 January following the end of the tax year that the return applies to.