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Making Tax Digital for Income Tax further delayed

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Following speculation last week, the Government has now formally announced that the start date for the introduction of Making Tax Digital for Income Tax (MTD for ITSA) has been put back a further two years.  It will then be introduced in stages.

MTD for ITSA (which was originally announced in 2015) will require those who fall within the scheme to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software.  It will therefore represent quite a significant change for many taxpayers, and the Government cited the current challenging economic environment as the reason for the delay – although it is widely suspected that HMRC had not itself got its systems quite ready!

Following previous postponements, MTD for ITSA had been expected to be introduced from April 2024 and would have affected all self employed traders and landlords who had income from these sources of £10,000 or above.

Following this latest postponement, the introduction has been delayed until April 2026, when it will be mandatory for self employed traders and landlords who have income of £50,000 or above.  Those who have income between £30,000 and £50,000 will be brought into the scheme from April 2027.

Further consultations will take place as to how taxpayers with income below £30,000 should be dealt with under MTD for ITSA.  The proposed roll out to partnerships in April 2025 will not now happen, but the Government confirmed the intention that partnerships will be included within MTD for ITSA at a later, but as yet unspecified, date.

This delayed introduction will undoubtedly be welcomed by taxpayers who had not yet made the transition to MTD-compliant software, and the extra time should give both businesses and software producers more time to prepare so that the roll out, when it comes, should hopefully be smoother.

However, there remain many sound business reasons for moving to digital record keeping sooner rather than later, and our Digital Finance team at BHP will be happy to advise on which solution would be best for you.

Should you need any advice on Making Tax Digital or any other matters, our Tax team is happy to help. Simply get in touch with your usual BHP contact, call 0333 123 7171 or email