Digital tax returns every quarter?

by Readers Question

9:35 AM, 28th February 2017
About 4 years ago

Digital tax returns every quarter?

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Digital tax returns every quarter?

I have spoken to my accountant in relation to Digital Tax Returns and he has advised me that, Landlords will be required to do Digital Tax Returns every quarter. In other words 3 times over the course of 9 months and then final Annual Self Assessment by 31 January.digital

He has told me that, 3 Digital Tax Returns which will be done over the course of 3 quarters will require the following:

1) All Receipts to back up Expenditure will need to be attached with Tax Return.
2) Every Property Income and Expenditure will “Need To Be Separate”as currently, you lump all properties Income and Expenditure together and put one figure for each Column (Income & Expenditure) This will No longer be the case as in case if you have 20 properties you will need to fill 20 Boxes for each property.
3) So if HMRC decides to look at your accounts which you submit on quarterly basis then they can simply select the properties they wish.
4) All addresses of properties will also be required.

Although above information are already prepared my accountant which we call it Summary Of Accounts however they are not submitted to HMRC unless there is an enquiry however, regardless if there is enquiry or not such information would need to be submitted which is likely to increase accountants fees.

Any idea, if Digital Taxation is definitely coming next year? If so how well prepared you are? My accountant does all my accounting and bookkeeping, but has already indicated that, he will significantly increase his fees.

Simon

Comments

Kathy Evans

14:38 PM, 4th April 2017
About 4 years ago

And I still don't know whether it is just my landlord income etc or everything that would go on SA return that will be covered by MTD

Michael Barnes

10:39 AM, 5th April 2017
About 4 years ago

Reply to the comment left by "Heather G." at "04/04/2017 - 11:42":

Businesses eligible for three line accounts will be able to submit a quarterly update with only three lines of data (income, expenses and profit)

I believe this does not include landlords with finance (and possibly includes no landlords).

Michael Barnes

10:48 AM, 5th April 2017
About 4 years ago

Reply to the comment left by "Kathy Evans" at "04/04/2017 - 14:38":

It is my understanding that the reporting will need to be done by the entity that produces the income:
- Each business (including lettings businesses) will need to submit.
- Employment income: the employer will need to submit.
- Interest on savings: the financial institution will need to submit.
- Dividends: the company will need to submit.

However, some income will not be reported in this way, so the tax-payer will need to submit the information, e.g.
- tips
- income from foreign savings/investments

The programme is entitled "Making Tax Digital for Business", so there is no requirement for individuals to make quarterly submissions (yet).

Whiteskifreak Surrey

10:54 AM, 5th April 2017
About 4 years ago

Reply to the comment left by "Michael Barnes" at "05/04/2017 - 10:48":

So if I am unincorporated individual LL do I submit?
Am I business or investment?
I am lost now ;o(((

Michael Barnes

11:25 AM, 5th April 2017
About 4 years ago

Reply to the comment left by "Whiteskifreak Surrey" at "05/04/2017 - 10:54":

Lettings is a business. HMRC says it is a business.

BUT it is not a trade for tax purposes.

See https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim1020
and an interesting (to me, at least) discussion at https://www.taxation.co.uk/Articles/2014/02/12/320291/rent-or-trade

Kathy Evans

9:33 AM, 6th April 2017
About 4 years ago

Accountingweb has pointed out that we'll have to do SIX returns, not four: http://www.accountingweb.co.uk/tax/hmrc-policy/mtd-taxpayers-must-make-six-submissions-to-hmrc

And, it's one set of returns for each business: "It is worth noting that a set of quarterly updates will be required for each trade or business undertaken by the taxpayer. Thus, a self-employed individual who also has some rental income will have to submit a set of quarterly updates for their self-employed trade, and another set of quarterly updates for their lettings business"

Plus an End of Period Statement for each business

Plus a Final declaration: In addition to submitting the end of period statement the taxpayer will be required to make a “final declaration”. This is the new name for the annual tax return (see new TMA 1970, s 8(7) - introduced by FB 2017, sch 25 para 3).

The final declaration is needed to report any income which has not been reported to HMRC through an EoPS, such as savings or employment income, and to make any necessary claims.

The whole thing is crazy.

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