Making Tax Digital (MTD) has been the key driver behind HMRC in the last few years. Digital record keeping and submissions for all businesses is seen as the future ...
With an unstable economy, huge inflation and many businesses not fully recovered from the pandemic, HMRC and the Treasury have taken the decision to delay Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) for another two years. This also means MTD for partnerships and companies will also be delayed, but they haven't made an announcement about this yet.
The scope for MTD for ITSA has also changed:
- Individuals with a total of £50,000 or more gross income from self-employment and rental will need to keep digital records from April 2026
- Those with self-employment and rental income between £30,000-£50,000, will be within MTD from April 2027
- For those under £30,000 there will be a review by the Treasury about an implementation date
Individuals can join MTD voluntarily if they wish.
HMRC let the cat out of the bag themselves before making a formal announcement by updating their website. Even after they removed the guilty web page, rumours were flying so it forced them to make it official.
It is obvious that MTD for ITSA will be introduced, so keep it in mind. There will be a time when all self-employed individuals, landlords, partnerships and limited companies will be submitting quarterly returns and paying their taxes at the same time, so be sure your accounting and bookkeeping software is up-to-date and MTD capable.
It's a welcome delay for many, but it is also important to plan for it.
If you'd like to find out more about anything I've written here, do call me on 01908 774323 or leave a comment below and let's see how I can help you.