I sold all my properties this year and basically closed the business down. My accountant will produce Accounts for the Tax year 25/26 as usual.
I am receiving mixed messages to my very simple question: why must I register for MTD when my income will be £0 in tax year 26/27?
My accountant says I must because my income was above £50k in tax year 24/25 and that is the criteria for mandatory registration.
The HMRC agent (who sounded about 16 years old) said I did not but I was not comfortable with her lack of confidence, that she was mostly reading from a script and the need to “check with a colleague”
@alan.tmb maybe use the online tool on the gov page
Find out if and when you need to use Making Tax Digital for Income Tax
?
If the tool results says you need to register for it, I’d do that even if you expect your actual income to fall so that the return will zero [in which case it’ll be very easy to complete wont it]
Remember hmrc will likely assume future income continues in line with previous unless it has knowledge otherwise, and will be trying to stop LLs from avoiding registering by claiming they expect zero income.
hmrc may based on past income request tax payments ‘on account’ and you may then have to tell them of the expected fall in landlord income so the amounts then get adjusted to zero. Or there may be a way to tell them online that you no longer need to do self assessment at all [if that’s the case]
If you are selling up you may well have CGT profit to report on the property sales, costs of selling the properties [claimed against the CGT profit not landlord income] so not obvious the business has yet entirely finished [and /or may be interest from savings on the £ obtained from sales]
Thank you David, Having investigated further I decided the correct action was to apply for an “exemption”. This can be done either by mail or phone. I chose phone and after 43 minutes I have just finished the call to the HMRC. The answer was no I do not need to register for MTD for 26/27. On my Tax return for 25/26 I simply tick box 2 on the property page (no further income from this property) and that will automatically exempt me from registering in 27/28. Hope this is helpful to any other landlords that have decided to chuck in the towel because the Government hate us so much.