MTD for ITSA postponed until 2026

December 20, 2022

Yesterday, the Financial Secretary to the Treasury, Victoria Atkins, announced the postponement of Making Tax Digital for Income Tax Self Assessment.

Following calls from across the accounting industry, including software providers and the CIOT, as well as HMRCs Administrative Burdens Advisory Board, a ministerial statement was released yesterday changing the timetable and scope of MTD for ITSA.

The key changes are as follows

  • Mandatory MTD ITSA filing delayed for two years, to April 2026
  • Minimum income reporting level increased to £50,000
  • Those earning more than £30,000 to join the scheme in 2027
  • Review to take place on landlords and sole traders earning less than £30,000
  • Partnerships will not be brought into MTD for ITSA  in 2025
  • Decision to be taken at a later date on when Partnerships earning less than £30,000 will join the scheme
  • Points-based penalty system to be extended to MTD ITSA

The Financial Secretary to the Treasury, Victoria Atkins, highlighted the Governments commitment to MTD, writing “Across the globe, digitalisation of tax is increasingly the norm. Modernisation of UK businesses and the tax system remains of crucial importance to the UK.

Making Tax Digital (MTD) for VAT is already demonstrating the benefits to businesses that digital ways of working can bring.”

Explaining the need for the changed timetable and scope, she added “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.”

You can read the full written statement here.

If you would like to speak to one of our team about MTD for ITSA, how it affects you or you have any general tax queries, please contact our Tax Partner, Gary Olding

Gary Olding

Gary is the National Head of Tax and overseas our Tax Compliance and Medical Tax Teams. When not dealing with clients he is supervising operations, troubleshooting, and optimising workflows.

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