Furnished Holiday Lets – Making Tax Digital (MTD)
Whilst the introduction of MTD for income tax has currently been put on the back burner by HMRC, they have not ruled out introducing it in near future. They have simply stated that it will not come into force until at least April 2020.
Going forward, MTD will change the current structure of self-assessment and you, as a landlord, will have obligations and reporting requirements that you need to fulfil through quarterly reporting.
If your turnover from Furnished Holiday Letting exceeds the VAT threshold (currently £85,000), MTD will however apply from April 2019, and as a landlord you will be obliged to:
- keep your records digitally (for VAT purposes only), and
- provide your VAT return information to HM Revenue and Customs (HMRC) through Making Tax Digital (MTD) functional compatible software
This will significantly bring forward the timescale in which HMRC receive information regarding your rental income and expenses and it is my belief that it will increase the administrative burden on landlords going forward.
As stated there is nothing concrete on the income tax side of MTD at the moment but as soon as the information is available further guidance will be provided.
If you are looking for advice relating to your FHL, please contact French Duncan Tax Senior Jen Kinnear either by email to firstname.lastname@example.org or call 01786 451 745.
This blog is part of a series of eight, you can see all other blogs here:
1. Furnished Holiday Lets - an introduction & your obligations
2. Furnished Holiday Lets - qualifying conditions & elections
3. Furnished Holiday Lets - Income Tax & Capital Gains Tax
4. Furnished Holiday Lets - Non Resident Landlords
5. Furnished Holiday Lets - VAT
6. Furnished Holiday Lets - Inheritance Tax
7. Furnished Holiday Lets - Conclusion & Services