I am a sole trader operating on a cash basis but have a private pension income which is taxed at source. How will this be dealt with under the MTD scheme, i.e. how and where will this information be added? If it’s just put down as income then it will get taxed twice. Pretty sure there’ll be many small businesses like myself run by people above pension age (I’m 70 and no desire to stop the computer repair business I have run for 20 years now) who will be encompassed by the forthcoming MTD.
Full details of MTD for self-assessment haven’t yet been finalised by HMRC, so some of the details are still unknown.
However, for the time being, these would normally be entered onto your self-assessment directly and wouldn’t be recorded on QuickFile, as they’re not related to the business activity.
Thanks. Guess we’ll have to wait and see how MTD is going to deal with that as the whole idea is to do away with the manual self assessment procedure. For now I’ll just ignore it.
From what I’ve read so far the idea seems to be that the reports you’ll submit every quarter through software such as QuickFile will replace the “self employment pages” of your current tax return, and you’ll have to keep accounts and submit quarterly reports and year end adjustments for each business separately if you have more than one source of self employed income.
Then separately from that, once you’ve submitted all your year end summaries through software there will be a single “declaration” that replaces the rest of the tax return, and it’s this declaration where you mention income from other sources such as employment or pensions, so it can be taken into account for the tax calculation.
Presumably HMRC will check (and maybe even pre-fill?) these details in the final declaration against your personal tax account info that they’ve been sent through PAYE.
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