Landlords who manage their portfolio through a VAT-registered business have been warned they must sign up to HMRC’s Making Tax Digital (MTD) initiative by 1st April.
It will then become mandatory for all businesses paying VAT to store details of their affairs digitally and file their tax returns using specialist software on a more regular basis.
Businesses with a taxable turnover above £85,000 have had to follow MTD since April 2019 as part of the overall digitalisation of UK tax.
Joanna Rowland, HMRC’s director general for transformation (pictured), says: “By signing up for Making Tax Digital, we expect most businesses to experience long-term benefits, including reduced errors and time saved in managing their tax affairs.
“We encourage businesses to explore digital record-keeping for their VAT affairs and use this time to choose the right software to support their business needs.”
Last September, the government gave landlords who fill in self-assessment forms with a business or personal income over £10,000 a year, an extra year to get ready for the switch.
This will now take effect in 2024 following feedback from property portfolio landlords and other business operators and their representatives about the additional challenges caused by the pandemic.
Many fear a steep learning curve as they get used to new HMRC compatible software and uploading routines to HMRC’s portal.
HMRC has also just announced that it will waive late filing and late payment penalties for self-assessment taxpayers for one month due to Covid pressures, giving them until 28th February to complete their 2020 to 2021 tax return and pay any tax.
Landlords need to visit GOV.UK and choose Making Tax Digital-compatible software no less than seven days before their first MTD VAT return deadline date.
Read morea bout MTD-compatible software.
HMRC reveals latest looming deadline for Making Tax Digital rules is written by Nigel Lewis for www.landlordzone.co.uk