13/07/2016
H M Revenue & Customs will be implementing Making Tax Digital over the coming few years. Their aim is for most landlords to be reporting their income each quarter via their digital tax account rather than after the end of the tax year on a tax return.
According to initial advice the quarterly reporting will require the taxpayer, or their agent, to use software products (not including spreadsheets) to record and report income & expenses. This will be phased in with full implementation planned for 2020. HMRC have stated that they will provide their own free software for use, or alternative software is available to be purchased. Cloud accounting software products are increasingly popular and some providers have simple packages available which could be suitable for use by landlords.
This is a huge change from the current process whereby many landlords keep paper records and hand them over once a year to their accountant for tax return completion after the end of the year. Will the next step be quarterly tax payments for landlords