From that date all businesses with combined annual income from self-employment or property above £10,000 will have to submit their tax return in a different way, as part of Making Tax Digital for Income Tax Self Assessment.
The HMRC wants to ensure the system is well tested before its introduction, and that agents and customers have opportunities to feedback on how it will work in practice and is running the pilot programme and inviting agents to recommend clients who can help them test it and learn.
The pilot is a test environment, so those taking part have the benefit of testing Making Tax Digital for Income Tax Self Assessment before April 2024, including their own internal processes for managing this change. Customers in the pilot so far have already completed their first quarterly submission successfully.
To sign up, customers should speak to their software provider or you as their agent to advise on the next steps. You can also send an email to HMRC directly if you are interested in signing up your clients to the pilot and would like further advice: [email protected]
Currently to be eligible, customers will need to have an accounting period that aligns exactly to the tax year (6 April to 5 April) to join the 2022–23 pilot, and have Making Tax Digital compatible software before signing up.
The HMRC suggests agents review their clients to decide who is likely to be eligible based on the current criteria.
The pilot currently needs customers who file for:
- Self-employment (including multiple self-employments)
- UK property
- Gift Aid
- Pay As You Earn income, including employment income and occupational pensions (excluding those with a coded out liability)
- UK interest
- UK dividends
Later this tax year, the pilot will be expanded to include the following customer types:
- Pension contributions
- CIS
- Student Loans
- Additional Self Assessment (SA 101)
- Foreign income from property
- Voluntary class 2 NICs
- Capital gains
- Marriage allowance
