Having listened to stakeholder feedback from businesses and the accounting profession, the government have announced that they are postponing Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) a year later than planned. Now, the government is introducing Making Tax Digital in the tax year beginning in April 2024.
This gives the self-employed and buy to let landlords an extra year to prepare for the digitalisation of Income Tax. The postponement will also allow HMRC more time for customer testing of the pilot system.
The government is planning to make the UK one of the world’s most advanced tax systems. MTD is the first phase of HMRC’s move towards a modern, digital tax service fit for the 21st century. It supports businesses through their digitalisation journey and provides a digital service for many to use in their everyday lives.
The government is pushing the start date for partnerships to join MTD for ITSA back even further. Instead, this will be introduced in the tax year beginning in April 2025.
There has been no change to the £10,000 per annum gross income threshold. This means that most self-employed traders and buy to let landlords will be mandated to comply with MTD for income tax from April 2024.
See: Businesses get more time to prepare for digital tax changes – GOV.UK (www.gov.uk)