With the economic environment challenging, the government has announced today (19 December 2022) that self-employed individuals and landlords will have more time to prepare for Making Tax Digital (MTD).
The aim is now to implement the change gradually so that MTD works for everyone: taxpayers, tax agents, software developers, as well as HMRC.
The significant changes individuals are experiencing in reporting Income Tax Self Assessment (ITSA) digitally have been recognised, with the deadline for the mandatory use of software extended from April 2024 to April 2026.
‘From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required
– to keep digital records
– and provide quarterly updates on their income and expenditure
to HMRC through MTD-compatible software. Those with an income of between £30,000 and £50,000 will need to do this from April 2027. Most customers will be able to join voluntarily beforehand meaning they can eliminate common errors and save time managing their tax affairs.’ Source Gov.uk
A review is being set up for smaller businesses who come under the £30,000 income threshold. It will consider how MTD for ITSA can meet the needs of these businesses whilst fulfilling their Income Tax obligations. The review will also help shape the approach for any further roll out of MTD for ITSA after April 2027.
Contact
If you would like to plan your route to MTD with one of our experts, please call either our Leicester accountants on 0116 254 9262, or Loughborough accountants on 01509 263500. Alternatively, our contact form is here.