Making Tax Digital: The Latest Changes
Making Tax Digital is coming, but did you know about the recent updates to the scheme?
It’s understandable if you’ve missed the latest updates, after a Christmas break of family gatherings, presents and losing track of which day of the week it is, getting back into a working routine is hard, let alone catching up with news.
But it seems that those in charge of Making Tax Digital actually spent the last couple of weeks of December making adjustments to the scheme. So let’s take a look at what is changing.
When is Making Tax Digital Coming into effect?
The scheme was originally due to come into effect on 6th April 2024, however, according to the latest government guidelines, released on 6th January 2023, MTD has been delayed until 6th April 2026 at the earliest.
So, if your landlord income exceeds £50,000, you previously had a little over a year to get your house in order (no pun intended). But now, you have over three years to get prepared.
If your landlord income exceeds £30,000, you have until April 2027 to make the change.
But don’t let this make you complacent, it will come around sooner than you think and it’s best to get into good habits sooner rather than later, so we suggest:
- Invest in software now. Take the time now to do your research to find the best software for you. This will give you time to get the hang of using it, iron out anything your unsure of and get into a good process before you absolutely have to
- Digitise today. If you’re mostly paper based, start to digitise today. Get into the habit of saving digital copies of your receipts – you’ll be happy you did!
Don’t forget, if you find tax intimidating, we had a tax mini series on The Mashroom Show that might make you feel better. You can learn more about Allowable Expenses, Holding Structures and Tax Planning Opportunities from expert Chartered Accountant and Chartered Tax Advisor Richard Cunningham.
Does Making Tax Digital apply to me?
This depends on your income.
- Landlord income of £50,000+: You must meet the MTD requirements from 6th April 2026
- Landlord income of £30,000+: You must meet the MTD requirements from April 2027
These income thresholds are pretty high, so many landlords are likely to be unaffected by the change. But, it stands to reason that they will bring in lower thresholds in years to come.
Yes, you could put off the move to digital until you absolutely have to, but there are a lot of benefits to going digital:
- Find what you need. Keeping track of things online is a lot simpler – if you digitise all your receipts for example and name them clearly, it’s a simple search to find what you’re looking for, rather than flicking through filing cabinets
- Nothing is lost. Having historical documents is important, you never know when you might need to refer back to a three-year-old Gas Safety Certificate, so make your life easier by having everything stored in the cloud. Using our free Document Storage even alerts you when a certificate is approaching expiry
- Easy sharing. If you have an accountant, downloading and emailing digital content is quicker and easier for both parties. Our free Income and Expense tracker allows you to download a simple .csv file to send to your accountant
It’s not too late to make a new New Year’s resolution – make going digital your landlord goal for the year!