2. Tax Planning for Estate Agents

According to a government statement, the MTD for ITSA rules will start:

• For businesses, self-employed individuals, and landlords earning over £50,000, from April 2026;

• For those with income over £30,000, from April 2027; and

• For partnerships, on a later date to be confirmed.

Currently, as per the legislation, for individuals with an annual turnover over £50,000:

• If their business existed before 6 April 2025, their digital start date is 6 April 2026;

• If they start a business on or after 6 April 2025 and must file a personal tax return for that business, the MTD for ITSA rules will apply:

– If they receive a notice to file for Year 1 after 31 October in Year 2, it will apply from 6 April in Year 4. Here, Year 1 is the assessment year for that return; and

– In other cases, it will apply from 6 April in Year 3, where Year 1 is the assessment year for that return.

Example

Lucy starts her business in 2025–26. On 6 April 2026, HMRC gives her a notice to file for 2025–26.

Lucy must use MTD for ITSA from 6 April 2027.

If HMRC issues the notice on 31 December 2026 (after 31 October in Year 2), Lucy will need to use MTD for ITSA from 6 April 2028.

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