1. HMRC and MTD for Individuals

If you're a landlord or self-employed and your combined property and/or business income is £10,000 or more per year, you will have to follow MTD for Income Tax rules from 6th April 2024.
Under these rules, HMRC will require you to use software to:
• keep digital records of your property and/or business income and expenses.
• send quarterly updates of your property and/or business income and expenses to HMRC.
• finalise your property and/or business income by submitting an end of period statement (EOPS) and final declaration to HMRC.

Keeping digital records
After 6th April 2024, landlords affected by MTD for Income Tax will need to use compatible software to keep a digital record of all their property income and expenses. If you’re a landlord and you’re also a self-employed business owner, Making Tax Digital legislation will require you to keep digital records of your business income and expenses separately.

Sending quarterly updates
Under the new rules, affected landlords will need to send a summary of their business income and expenses to HMRC every three months using compatible software.
The deadlines for submitting quarterly updates will be the same for everyone who has to follow MTD for Income Tax rules. From 6th April each year from 2024 onwards, these deadlines will be:
• 5th August
• 5th November
• 5th February
• 5th May

Finalising your income
At the end of the tax year, landlords affected by MTD for Income Tax will need to finalise their property and/or business income by submitting:
• an end of period statement (EOPS) for each source of property or business income
• a final declaration (which will replace the annual Self-Assessment tax return)
The process of submitting an EOPS and final declaration for each source of property or business income allows you to confirm that the updates you’ve sent to HMRC throughout the tax year are correct. It also gives you an opportunity to add details about any relevant personal income or tax reliefs you received during the tax year, and to make other necessary adjustments.
For each tax year, you’ll be required to submit your required end of period statements and your final declaration by 31st January of the following tax year. You’ll also be required to pay the tax you owe in relation to each tax year on this date.
As far as I can see, at this time, this is based on each person’s income, not the whole property, so if the rental income is split for tax purposes, then we look at each person’s income individually this should mean some people will not need to report quarterly.

2. Rental Income

The Finance cost relief has been reduced to basic rate only from 2020. It does not mean you loss it – just the way it is calculated has changed and how your income is recorded. It has meant that some people have found themselves in the 40% bracket.


3. Workplace pensions

Every employer with a least one member of staff will be required by law to provide a workplace pension. This is now at the point where businesses are having to renew their registration and employees will be put back into the scheme – they have the right to opt out again but it is something they will have to do. Employers cannot tell them to do it or do it for them.

4. Dividends

The tax-free Dividend Allowance is still £2000 per tax year.

The allowance is available to anyone who has dividend income.
Headline rates of dividend tax are also changing.
You’ll pay tax on any dividends you receive over £2,000 at the following rates:
o 8.75% on dividend income within the basic rate band
o 33.75% on dividend income within the higher rate band
o 39.35% on dividend income within the additional rate band

But be aware that all other income will be taken into consideration first which will determine which band of income the dividend is taxed at.


5. IR35

The government announced in the Mini-Budget that the changed to the IR35 rules brought in from 2017 will be repealed. The suggestion is that we all go back to the way it was done before. Therefore, no longer will the ‘big’ company have to decide if they have to deduct tax from you but it will be again back to you and your limited company.

6. Mini-Budget

You also maybe aware that the tax rate will be reducing in April 2023 and also the corporation tax will be held at current levels. As far as Energy help is concerned then this will depend on you circumstances but you will not get any extra relief if you ‘work’ from home.

Les Tasker October 2022