We are sharing this update from ACCA, our professional body, for the interest of clients and contacts. The content is (c) ACCA
ACCA welcomes announcement that this major change will now be mandated from 2026
On 19 December 2022, the UK government announced that Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) will now be mandated starting from April 2026, rather than from April 2024.
ACCA has been asking for some time, both for our members and HMRC which is struggling with service levels, to pause and phase in MTD for ITSA – and this announcement will provide members more time to prepare their clients. HMRC will also have the time required to carry out further testing and provide detailed implementation guidance.
The details announced include the following changes to the original proposals:
- from April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required (mandated) 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 up to £50,000 will need to do this from April 2027
- most taxpayers within the scope of MTD for ITSA will be able to sign up voluntarily before they are mandated to do so
- the UK government will not extend MTD for ITSA to general partnerships in 2025. The government remains committed to introducing MTD for ITSA to partnerships at a later date, to be confirmed.
The government will review the needs of smaller businesses, and particularly those under the £30,000 threshold before taking further decisions. This will look in detail at how the MTD for ITSA service can be shaped to meet their needs and the best way for them to fulfil their income tax obligations. Once that review is complete – and in consultation with businesses, taxpayers, agents, and others – the government will lay out the plans for any further mandation of MTD for ITSA.