The entry threshold for MTD ITSA reporting is stated to be at least £10,000 of qualifying income each year. Here, qualifying income refers to the total income from property income and self-employment that one earns in a tax year.
Other types of income, like employment income or interest on dividends, do not fall under MTD ITSA and need to be reported using either HMRC online services account or an MTD-compatible software solution.
Jointly held property is one of the areas on which people have the most questions, particularly with regard to how income from multiple property portfolios would need to be aggregated before submitting to HMRC.
Many families hold property jointly with varying percentages of shares, and someone with multiple portfolios could deal with numerous accountants, each handling one property.
The HMRC is not very clear on this, except for a statement saying that, at present, only one agent could access each customer’s MTD account and that they were working to understand and accommodate multiple agent access.
Landlords with gross income up to £150,000 annually can choose which accounting system they want to use, although cash is the default. For income higher than that, they will have to use the GAAP system of accruals accounting.
- While the landlord’s accountant can be added to the tool as a user, the tool itself focuses on displaying the portfolio rather than detailed financial reports, which is what the accountant really needs.
- Most of these tools have limited mobile functionality, making it harder to pull up information on the go.
- Most tools are not designed to handle the bookkeeping needs of non-professional landlords and often lack core functionality like the ability to categorise transaction types.
- Such tools cannot include other sources of income, like sole trading revenue, which means landlords have to use separate accounting software to handle those income sources.
- Ability to manage more than one property in the same account, including both unincorporated and limited company ownership
- Easy-to-understand workflows that present non-professional landlords with all their portfolio details in one place
- Comprehensive income visibility and control over multiple streams of income, including tax liability percentage calculation in case of joint ownership of property
- In-built tax calculations that reflect the latest laws
- Easy transaction identification and designation, even from multiple bank accounts.