Important update regarding Making Tax Digital for Self-Assessment

On Monday 19th December 2022, the First Secretary to the Treasury issued a statement regarding Making Tax Digital for Income Tax Self-Assessment. The new rules, which would have affected all self-employed businesses and landlords with turnover of over £10,000 per year, were due to come into effect from April 2024. This has now been delayed to April 2026 and other changes have also been announced.

• A two-year delay until April 2026 for mandatory MTD ITSA filing.
• Minimum income reporting level increased to £50,000, with those earning more than £30,000 mandated to join the scheme in 2027.
• The situation for landlords and sole traders earning less than £30,000 will be reviewed to see if MTD ITSA can be shaped to meet the needs of smaller businesses.
• Partnerships will not be brought into MTD for ITSA as previously planned in 2025.
• Points-based penalty system to be extended to MTD ITSA filers when they join.

Matthews Hanton still recommend that clients consider a transition to digital record keeping, as these rules will come into effect eventually. However, we are pleased that this gives clients more time to prepare for this. If you wish to look at your options regarding digital record keeping, please contact us.