Hawthorne tax consultancy

Making Tax Digital (MTD) – Landlords and Sole Traders

For our article regarding MTD for VAT, click here.

From April 2024, Making Tax Digital will apply to all sole traders and landlords who have a total income of over £10,000.00 per year. It will require them to submit quarterly returns and keep their accounting records digitally and ensure that where more than one piece of software is used, they are digitally linked from source to submission.

Any business operating since 6 April 2023 will join MTD from 6 April 2024 regardless of their accounting period end. 

Does this apply to me?

There are two means by which an individual may be caught.

  1. They have a total business or property income of £10,000.00 or over
  2. They have more than one trade or property, which together earn over £10,000.00 per year. For example, £5,000.00 of rental income and £8,000.00 from a sole trader business, as they have a combined income of £13,000.00, will be required to join MTD.

What are the Reporting Requirements if I’m caught?

Quarterly returns

If you are subject to MTD, you will have to make quarterly returns starting from 6 April 2024 to 5 July 2024 and every three months. Alternatively, a calendar quarter election can be made, allowing the quarterly returns to run from the first day of the month.

Regardless of which option is chosen, the first return will be due 5 August 2024, then every three months thereafter. It is understood that separate quarterly updates will need to be made for each trade and property business.

End-of-Period Statement EOPS

You will also need to complete an end-of-period statement or EOPS. This document has much the same effect as the current self-assessment and will be due for filing at the normal self-assessment deadline of 31 January following the relevant tax year. A separate EOPS will be needed for each trade and property as with the quarterly returns.

Final Declaration

In addition to the EOPS(s), you will also need to submit a final declaration to bring together all business and personal information required to determine the final tax liability – including both EPOS and non-MTD sources of income such as dividends and bank interest.

If you would like to know more about MTD for individuals or landlords or any other services, don’t hesitate to contact us today.

All information provided in this article is for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant. It should in no way be considered as advice provided by Hawthorne Tax Consultancy or any of its principals. All information is deemed to be correct at the time of writing.