HMRC’s vision to digitalise the UK tax system continues to unfold with General Partnerships that have a taxable income above £10,000 set to join
Making Tax Digital (MTD) for Income Tax from April 2025.
From April 2025, MTD ITSA will be mandatory for general partnerships, but not limited liability partnerships or partnerships with a corporate or other ‘non-natural partner’. The date that other types of partnerships are required to join, will be confirmed in the future.
Similar to the rules for
self-employed businesses and landlords set to apply from April 2024, General Partnerships will need to send a quarterly summary of their income and expenses to HMRC using MTD-compatible software.
Currently there is no confirmation as to how flexible filing quarterly updates is going to be, otherwise businesses within the MTD for VAT threshold who’s quarters do not align with their accounting period, could effectively have eight quarterly updates to file each year.
CHOOSING AN MTD COMPATIBLE SOFTWARE
Further to MTD-compatible software, General Partnerships will need to consider choosing a software package to keep their business records in a digital format. Most businesses already keep their business records digitally using platforms such as
QuickBooks and
Xero, but for MTD-compatibility the software will be required to communicate with HMRC through API technology. You can find MTD-compatible software packages currently available
here.
If you’re wondering how MTD for ITSA may affect your general partnership,
contact us to get in touch with an expert. We can also help you decide on which MTD-compatible software is right for you, click
here to find out more.