HMRC releases more details MTD for Income Tax
HMRC has published more details on how Making Tax Digital for Income Tax (MTD for IT) will work for buy-to-let landlords and sole traders with qualifying income over £10,000.
The new income tax framework for MTD for IT will be mandatory from 6 April 2024. HMRC is now asking for users to sign up for the test phase.
The new system will replace self assessment tax returns for anyone who qualifies for MTD for IT as they will have to submit all non-qualifying income through the Personal Tax Account (PTA) system instead.
Anyone who qualifies will have to make quarterly submissions, and the new deadline for end of year statements will be 31 January after the end of each tax year.
HMRC will use data from self assessment tax returns to calculate qualifying income in the first instance and will contact all affected taxpayers directly to inform them that they fall under the mandatory MTD for IT rules.
‘Your qualifying income is the combined income that you get in a tax year from self-employment and property income sources. We assess this before you deduct expenses (that is, your gross income or turnover).
‘All of your qualifying income must be reported through MTD compatible software.
‘All other sources of income reported through self assessment, such as income from employment, dividends or savings, do not count towards your qualifying income. You will need to report income from these sources using either your MTD compatible software (if it has the functionality) or HMRC online services account.’
Find out more about Using MTD for IT and Check if you can sign up for MTD for IT
Experts warn inflation could keep rising in 2023
Economic analysts have warned that the rate of inflation could keep rising in 2023 as a result of rising energy prices.
Think tank the Resolution Foundation stated that inflation could go above 15%, whilst investment bank Citi said that it is ‘entering the stratosphere’ and could reach 18.6%.
Predictions outlined by the Bank of England (BoE) have suggested that inflation could rise to over 13% later this year.
Report finds decline in the use of cash is easing
Banking trade body UK Finance has revealed that the rapid decline in the use of cash as a form of payment has eased.
A report published by UK Finance found that 40.4 billion payments were made in 2021, which marked a return to pre-pandemic levels. Cash payments accounted for 15% of all payments in the UK.
In 2021 there were 23.1 million consumers who used cash as a form of payment just once a month or not at all. At the same time, there were 1.1 million consumers who mainly used cash when doing their day-to-day shopping.
Debit cards proved to be the most popular form of payment method, making up 48% of all payments.
Find out more on the UK Finance website
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