After much speculation over the last few weeks, HMRC have officially announced that Making Tax Digital for income tax self assessment (MTD for ITSA) will be delayed for two more years until April 2026.
Making Tax Digital for Income Tax (MTD for ITSA) is part of the government’s plan to make tax recording more efficient, effective, and accurate for individuals and businesses.
MTD for ITSA was due to take effect from April 2024 and would’ve required all self-employed individuals and landlords with income over £10,000 to report earnings quarterly through the MTD for ITSA system.
However, in a statement released late yesterday afternoon, Victoria Atkins, Financial Secretary to the Treasury, confirmed that the mandation of MTD for ITSA will now be introduced from April 2026, with businesses, self-employed individuals and landlords with income over £50,000 required to join first.
From April 2027, those with income over £30,000 will be mandated to join.
Ms Atkins stated that the government,
understands businesses and self-employed individuals are currently facing a challenging economic environment, and that the transition to MTD for ITSA represents a significant change for taxpayers, their agents and for HMRC’.
The Treasury said that the government now intends to review the needs of smaller businesses in regard to MTD for ITSA, and will consider how the initiative can be shaped to meet their needs.
Once the review is finalised, the government will outline plans for any further mandation of MTD for ITSA.
The Treasury also stated that the government will not extend MTD for ITSA to general partnerships in 2025, saying that the government ‘remains committed to introducing MTD for ITSA for partnerships at a later date’.
In summary, the key changes announced by the government yesterday afternoon were as follows:
Business Owners will need to make sure they are ready for MTD for ITSA when it becomes mandatory.
It is important you keep complete records of your business’s earnings and outgoings so you can make sure that your tax and VAT returns are accurate.
| If you have any questions or need advice after the announcement of the delay to MTD for ITSA, then please contact us and we will be happy to help. |
