Landlords, sole traders and the self-employed in London are being urged to prepare for ‘the death of the traditional tax return’ in April.
International accountancy and business advisory group Azets is warning that those with gross income above £50,000 per year will have to comply with a new Making Tax Digital (MTD) regime.
Under the HMRC shake-up, qualifying individuals and businesses will be required to keep digital records, use MTD-compatible software and submit updates every quarter, as well as a final declaration.
The overhaul – the most significant since the introduction of self-assessment in 1997 – will bring the tax system closer to real-time and affect 864,000 individuals and landlords nationwide from April 6 of this year, with numbers predicted to rise to 2.9m within three years.
Azets has its London base at London Bridge.
Fraser Campbell, UK Head of ABAS at Azets, said: “MTD truly signifies the death of the traditional income tax return.
“It represents a major change with the introduction of digital reporting obligations for hundreds of thousands of landlords, sole traders and the self-employed from April onwards.
“It is crucial that they put plans in place to deal with this shift to ensure a smooth and compliant transition to the new regime as the April deadline is fast approaching.
“While this will mean changes in processes and software that is compliant with MTD, the switch will bring advantages too with access to near real-time digital information about taxes for thousands of people for the first time.
“It will place accurate financial information into the hands of you or your tax adviser more regularly to assist with visibility over business performance, forward tax planning and forecasting as well as a smoother year-end process.”
