Making Tax Digital (MTD) will change how self-employed GPs handle their tax returns every year.
From 6 April 2024, MTD will be rolled out to self-assessment tax returns and will digitise the whole process.
Before that happens, you should know exactly what to expect so you get everything right from day one. This article will explain all of the changes for paying your income tax through MTD.
Will MTD apply to me?
As a self-employed GP, you will need to register for MTD if you earn above £10,000 a year. Once you reach this threshold, you’ll need to prepare and file your self-assessment tax return through compatible software.
The rollout of MTD for income tax self-assessment (MTD for ITSA) was delayed from its planned launch in 2023 due to the Covid-19 pandemic.
This gives you more time to prepare and find out more about MTD-compatible software, which is no bad thing.
What will MTD involve?
As mentioned, your annual expenses and documents will be kept digitally, minimising the risk of losing any physical paperwork.
You’ll need to provide quarterly updates of any income and expenses for the following periods:
|Period covered||Filing deadline|
|Update 1||6 April – 5 July||5 August|
|Update 2||6 July – 5 October||5 November|
|Update 3||6 October – 5 January||5 February|
|Update 4||6 January – 5 April||5 May|
You’ll also have to file an end of period statement , making any adjustments and finalising your taxes. This will then be due for the usual self-assessment deadline of 31 January on the relevant tax year.
The final step will be to submit your final declaration, which will bring all of your personal and business information together and determine your final tax liability. Again, this will be due on 31 January.
What can you do now?
HMRC has officially announced a pilot scheme for MTD for ITSA where some self-employed workers can register.
You can now sign up through a recognised provider that offers software that works with MTD for ITSA. If you’re already using MTD-recognised software, you can contact your provider to discuss signing up.
If you’re unsure of what providers are compatible with MTD, the Government website has a full list.
To voluntarily sign up, you must:
- be a UK resident
- already be registered for self-assessment tax returns
- have an accounting period that aligns to the tax year
- have submitted at least one self-assessment
- keep digital records
- have included an existing self-employment income in your last return.
The earlier you sign up for the pilot, the sooner you can get used to the new ways of working. The team at JCS can help you with that, including the sign-up process.
Get the ball rolling
The accounting team at JCS is well-versed in preparing and filing tax returns for people in the healthcare industry. Together, with the combined knowledge of MTD, we can help you get ahead of the curve.