Making Tax Digital delayed
Still keeping you on track
After a lot of speculation and a recent “leak”, HMRC have now confirmed that Making Tax Digital for Income self assessment (MTD for ITSA) is being delayed by 2 years. It will instead be phased in from April 2026, rather than April 2024.
MTD for ITSA will now first hit individuals and landlords with income greater that £50,000 from April 2026. Those with income between £30,000 and £50,000 will then be caught the following year in April 2027. This is a massive shift from the original threshold of £10,000. It will also not be extended to general partnerships in 2025 as previously planned.
In addition to the delay, the government has announced that there will be a review into how MTD should be shaped to meet the needs of smaller businesses and consider the approach of any further roll out of MTD for ITSA after April 2027.
This announcement is welcome news for many as there were a lot of question marks around whether HMRC themselves would have been ready in time for the original roll out.
While there is a delay in MTD for ITSA don’t let that slow you down in embracing technology and digitalising your records. Earlier in the year we published Online systems are for you, not your accountant outlining how digitalisation benefits you as the business owner. While these benefits may seem to be focused on “larger” businesses many are still true for landlords and sole traders.
For example, utilising the right software for landlords will assist in the property management side of things:
- Landlords can keep track of rental receipts and identifying quickly if a tenant falls behind on payments.
- They can also store important documentation in one place and set reminders of when insurance renewals or electrical checks are due for each property.
- Many can link directly to websites such as Zoopla & Rightmove to monitor property valuations.
In addition to the above, utilising the right software will help reduce the annual headache of collating your personal tax return paperwork and give you clearer line of sight on what your potential tax liability will be.
HMRC may have moved the finish line, but it is important to keep on track with your own digital journey.
If you would like to find out more about Making Tax Digital or if there is anything else we can help you with, please don’t hesitate to get in touch with our team.
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