Autumn Budget 2024 brought a further announcement regarding Making Tax Digital for Income Tax Self Assessment:
“The government is committed to delivering Making Tax Digital (MTD) for income tax Self Assessment. The government will expand the rollout of MTD to those with incomes over £20,000 by the end of this Parliament, and will set out the precise timing for this at a future fiscal event.”
There are a couple of things to unpack here.
First a commitment that the MTD for ITSA is going ahead. Its been delayed a few times and HMRC record on delivering change and IT isn’t brilliant, and it was conceivable it could have been scrapped / kicked into long grass. Anyway, we know, for now at least, its going ahead so impacted businesses and taxpayers can plan.
Secondly, an open ended commitment to bring incomes over £20,000 into MTD for ITSa before the end of the parliament – in this context “income” is business turnover for Sole Traders and Partnerships, and gross rents for Landlords. Currently the staging is:
- From April 2026 landlords, sole traders and partnerships with turnover or rents of £50,000 or more
- From April 2027 landlords, sole traders and partnerships with turnover of or rents £30,000 or more
So for incomes over £20,000 we are looking, presumably, at April 2028 or April 2029 assuming the parliament runs a full five years.
No news at present about MTD for Corporation Tax.
The takeaway from this most recent announcement is that unincorporated businesses – Partnerships and Sole Traders – plus landlords – need to start to prepare for quarterly filing, which means:
- Choosing, implementing and familiarising with suitable software
- Digitisation of manual aspects of bookkeeping and accounting
There is no overall change in how tax liabilities are calculated, nor in either payment dates or the overall tax finalisation date, the later both being 31st January after the tax year end.
Read more on our Making Tax Digital for Income Tax Self Assessment Page
