UK and International Tax news

Treasury Announces Delay to MTD For Income Tax Self Assessment

Tuesday 20th December 2022

In a written statement made by the Financial Secretary to the Treasury yesterday, the Government has announced that MTD for Income Tax Self Assessment would be delayed for two years to April 2026.

Following representations from professional bodies, the Government has now recognized the significant burden that would be placed on taxpayers, as well as the poor testing of HMRC IT systems, and confirmed that the introduction of quarterly tax reporting will be phased in from April 2026 instead.

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.

The Government also announced a review into the needs of smaller businesses, and particularly those under the £30,000 income threshold. The review will consider how MTD for ITSA can be shaped to meet the needs of these smaller businesses and the best way for them to fulfil their income tax obligations. It will also inform the approach for any further roll out of MTD for ITSA after April 2027.

Mandation of MTD for ITSA will not be extended to general partnerships in 2025 as previously announced although the Government remains committed to introducing MTD for ITSA to partnerships in line with its vision set out in its tax administration strategy published in 2020.

 

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