This is breaking news and was announced yesterday. Making Tax Digital was supposed to be in by 2024 for the self-employed and landlords, but this change follows weeks of urgent calls from professional bodies, tax software representatives and practitioners.
Financial secretary to the Treasury Victoria Atkins released a ministerial statement setting out adjustments to the scope and timing phases of MTD ITSA which include:
- 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.
While Atkins said 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.
Our MD Jill says “this is welcome news for small businesses and landlords who find themselves in the middle of a cost of living crisis. What this means is that they have longer to prepare and with what looks like an increased reporting level will be welcome I think across the board. We shall be letting our readers know more of the details as we get them in the New Year”