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MTD and who will be included

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I have just received an email from FTAX (the software provider that I currently use to submit individual tax returns) and just wanted to confirm that from April 2023 those in receipt of either/or both self employed income and rental income will become part of the MTD process (providing the amount is in excess of £10k).  The email from FTAX says;-

MTD Self Assessment will require:landlord and self-employment incomes and expenses data to be submitted at least every quarter (provided the tax filer’s total income exceed £10k per annum).

I was under the impression that if you had PAYE earnings and rental income below £10k, you would not be required to do the quarterly returns.  The statement from FTAX implies that the requirement is based on total income ie PAYE + rental income.  

I would welcome any comments

Replies (17)

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By Silver Birch Accts
14th May 2021 14:00

PAYE income is not included.

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By Paul Crowley
14th May 2021 14:33

Agree Silver
Rubbish words from your provider
'Income' means rent received or turnover

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By SXGuy
14th May 2021 14:40

Your email refers to self employed and rental income. Not total income including other sources.

I think the 5th adjustment submission at year end will include those other incomes, but the basis on joining Mtd is for income over 10k from SE or rental income.

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Replying to SXGuy:
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By johnhemming
14th May 2021 15:18

There is an end of year submission for correcting HMRC's records of employment income if they are wrong. There is additionally an equivalent to SA103F type fifth period adjustment that can be done by a tax agent or taxpayer.

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By NotAnAccountant2
14th May 2021 15:43

I'm wondering what happens where it's a jointly owned property and only one of the owners gets caught by MTD. Especially if the owner with the smaller share of the income is the one that currently keeps all the records.

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Replying to NotAnAccountant2:
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By johnhemming
14th May 2021 16:45

As far as I know people are not prevented from joining ITSA by having a lower revenue.

The way I do property is to have all the figures at their gross amounts and then apply a percentage to those. This percentage can vary depending upon the percentage owned by the person concerned.

Hence two owners can have the same data (copied in some way) and different percentages.

In the same way as VAT started out with mandation at 85K and is going down to 0 one should not be surprised if ITSA is the same.

HMRC have ensured there is free software available for the smaller taxpayers (and in one case the larger taxpayers as well)

Although I provide VAT services for a number of tax agents in fact I am only working for taxpayers for the purposes of ITSA and the tax agents have not started using it.

I was talking a small landlord through the submission of the annual tax return today (its called crystallisation) she seemed quite happy with the process.

I accept that some tax agents see this as a process leading towards retirement, but it is not the case that all taxpayers see it as something scary.

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By Matrix
14th May 2021 15:46

MTD for ITSA will apply from April 2023 to unincorporated businesses and landlords with total business income or property income above £10,000 per year.

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Replying to Matrix:
ALISK
By atleastisoundknowledgable...
14th May 2021 16:12

Is it ABOVE £10k, or AT LEAST £10k?

I have a rental partnership with 8 equal partners that will have profits of exactly £80kpa until 2035. Only 1 of those partners has s/e income, the others are all PAYE only.

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Replying to atleastisoundknowledgable...:
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By Paul Crowley
14th May 2021 19:50

Wait out
Cannot believe there will not be a lift in the limit for turnover

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Replying to Paul Crowley:
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By johnhemming
14th May 2021 20:37

Look at it from the HMRC point of view. They can either delay implementation or be flexible on enforcement (including being flexible on lower turnovers). What would you do if you were running HMRC.

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Replying to johnhemming:
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By bernard michael
15th May 2021 09:30

johnhemming wrote:

Look at it from the HMRC point of view. They can either delay implementation or be flexible on enforcement (including being flexible on lower turnovers). What would you do if you were running HMRC.

Resignation springs to mind

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Replying to johnhemming:
By SteveHa
04th Jun 2021 15:11

Abandon the whole ill-conceived idea and start again, asking people who know what they are doing, this time.

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By Richard Cliff
04th Jun 2021 10:59

How is MTD going to affect incorporated businesses? If they are not going to be included in MTD then surely, with increased accountancy costs, it would make sense to incorporate those businesses whose income is above £10,000. Does income mean profit or turnover/rent received?

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Replying to Richard Cliff:
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By Richard Cliff
04th Jun 2021 11:45

Richard Cliff wrote:

How is MTD going to affect incorporated businesses? If they are not going to be included in MTD then surely, with increased accountancy costs, it would make sense to incorporate those businesses whose income is above £10,000. Does income mean profit or turnover/rent received?


I have read 2026 for limited companies and have taken £10,000 and above to mean profits, since it says businesses over the VAT registration limit.
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Replying to Richard Cliff:
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By Matrix
04th Jun 2021 15:38

MTD for income tax has nothing to do with VAT reg, I have pasted the exact wording above already.

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Replying to Richard Cliff:
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By barberbuzz
04th Jun 2021 15:58

I believe its income above £10 000 that would come within MTD. So exactly £10 000 wouldnt. The £10 000 is gross takings not profit I am afraid. Just hope they increase that threshold and/or put the whole thing off for ages

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Replying to Richard Cliff:
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By barberbuzz
04th Jun 2021 15:58

I believe its income above £10 000 that would come within MTD. So exactly £10 000 wouldnt. The £10 000 is gross takings not profit I am afraid. Just hope they increase that threshold and/or put the whole thing off for ages

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