The Treasury has announced that Making Tax Digital for income tax self assessment
(MTD for ITSA) will be delayed for two more years until April 2026.
MTD for ITSA was due to take effect from April 2024 and would have 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 Written Statement, Victoria Atkins, Financial Secretary to the
Treasury, confirmed that the mandation of MTD for ITSA will now be introduced
from April 2026. Businesses, self-employed individuals and landlords with income
over £50,000 will be required to join first. From April 2027, those with income
over £30,000 will be mandated to join, the Treasury said.
Ms Atkins said:
'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.
'That means it is right to take the time needed to work together to maximise
those benefits of MTD for small business by implementing gradually.'
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'.
Internet link: UK Parliament website