The government announced yesterday in response to urgent calls from a number of professional bodies and software representatives, that the proposed timing of for Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) would be delayed from the intended start date of April 2024. The details are as below;
- 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.
The First Secretary to the Treasury said that the government remains committed to introducing MTD for ITSA to partnerships, the decision on when they might join the scheme will be taken at a later date, as for those on less than £30,000.
It seems likely that technical uncertainties from software suppliers were key to the government decision and software industry insiders suggested that with the issues outstanding, and potential complications of a general election and civil service purdah, a one-year delay wouldn’t work, so it was a choice between either two years or nothing.
