Important Update: on 19 December 2022 the Government announced that the next stage of Making Tax Digital would be postponed from April 2024 to April 2026. The threshold for meeting Making Tax Digital requirements is also under review. We’ll keep you updated.
Most VAT-registered businesses are already living with Making Tax Digital (MTD). Sole Traders … it’s coming for you!
MTD is set to change the way that Self Assessment tax returns are submitted, potentially affecting 3.2 million sole traders in the UK. From 6 April 2024, any individual earning over £10,000 gross income each year from self-employment or property must:
- keep their accounting records electronically
- file new quarterly updates, and
- submit an end of period statement and final declaration.
“Many sole traders spend hours completing their annual Self Assessment tax return and dread the process every year,” says Felicity Reader, Accounts Senior with re:accounts in Stevenage. “However using an electronic system saves valuable time despite the extra MTD submissions needed by HMRC. Plus, quarterly returns are a huge help for tax planning and cashflow. MTD doesn’t need to be bad news! ”
Perceived fear factors
Research shows that 21% of sole traders have no idea that MTD is approaching them fast. Of those who are aware, concerns involved the perceived:
- Extra time required (62%)
- Additional cost involved (57%)
- Distraction from running the business (50%)
40% of sole traders surveyed said they would be willing to pay a monthly fee for professional support in their transition to MTD.
A helping hand …
The re:accounts team understands how stressful submitting tax returns can be. Luckily, we love it! Most business owners dread bookkeeping and accounts, preferring to concentrate on running their businesses. At re:accounts, the world of tax returns, bookkeeping and accounts is our business. It’s what we do … what we’re passionate about.
Will you need to convert to MTD in 2024?
Now is the perfect time to plan ahead and make sure you’re ready. Have a chat with the friendly experts at re:accounts. We’ll make sure that you meet the new HMRC requirements seamlessly and with minimal stress. Let’s talk.
