What are obligations?
Definition of obligations
MTD for Income Tax will come into effect in April 2024 and will replace the annual Self Assessment tax return for many taxpayers.
Each affected taxpayer will have multiple obligations that are based around their accounting period. For example, a sole trader whose accounting year runs from 6th April to 5th April of the following year will have to submit four quarterly updates. In this example, the sole trader’s obligation periods would be:
- 6th April - 5th July
- 6th July - 5th October
- 6th October - 5th January
- 6th January - 5th April
The sole trader will also be required to submit an end of period statement for their accounting year and to finalise the business’s income in a final declaration which confirms that the updates sent are correct.