Extra time to prepare for MTD for Income Tax Self-Assessment
Recently HM Revenue and Customs (HMRC) announced that businesses will have an extra year to prepare for the digitalisation of Income Tax.
Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) was scheduled to be introduced from April 2023 for businesses and landlords with business and/or property gross income over £10,000 per annum. Following the recent announcement, this is now being deferred by one year and will not now be introduced until April 2024.
General partnerships will not be required to join MTD for ITSA until the tax year beginning in April 2025.
Those required to register for MTD ITSA will need to keep digital records and use software to update HMRC quarterly, through MTD software. MTD does not change when taxpayers need to pay their tax. HM Revenue & Customs believe that these changes to the tax administration system will increase efficiency and reduce input errors.
Please note that the date by which VAT-registered businesses with taxable turnover below £85,000 must have joined MTD for VAT has not changed and is still planned to go ahead from April next year.
If your business needs help implementing MTD, please do not hesitate to get in touch. Call our Lancaster office on 01524 67111 and one of our specialists will be able to help.
Timeline of the MTD rollout
- April 2019, businesses with taxable turnover above the VAT threshold (£85,000 per annum) were required to sign up for MTD for VAT.
- April 2022, VAT-registered businesses with taxable turnover below £85,000 need to have joined MTD for VAT for their first tax return from April 2022.
- April 2024, the new deadline for MTD for Income Tax, where businesses and landlords with business and/or property income over £10,000 per annum that are liable for Income Tax will need to keep digital records and provide quarterly updates to HMRC.
Author: Alan Taylor FCCA
A former pupil at Ripley St Thomas C of E High School in Lancaster, Alan joined Scott & Wilkinson directly from school in 1994 and qualified as an Accountant in 2001. Alan is the Partner with responsibility for the day-to-day...
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