Making Tax Digital for Income Tax Self Assessment Delayed
The Government has announced a further delay to Making Tax Digital for Income Tax Self Assessment (MTD ITSA). The mandatory start date has been pushed back from April 2023 to April 2024, giving self-employed individuals and landlords more time to prepare.
Updated timeline: Self-employed individuals and landlords with annual business or property income above £50,000 will need to comply with MTD ITSA from April 2026. Those with income above £30,000 will follow from April 2027.
What Is MTD ITSA?
Making Tax Digital for Income Tax requires self-employed individuals and landlords to keep digital records and submit quarterly updates to HMRC using compatible software, rather than filing a single annual Self Assessment tax return.
Who Will Be Affected?
Self-Employed
Sole traders and freelancers with annual gross income above the threshold will need to submit quarterly digital updates.
Landlords
Individuals receiving property rental income above the threshold, whether from a single property or a portfolio.
Partnerships
General partnerships where all partners are individuals will be required to comply from a later date yet to be confirmed.
How to Prepare
- Start keeping digital records now using cloud accounting software such as Xero
- Ensure your software is MTD-compatible for Income Tax
- Consider signing up for HMRC’s voluntary pilot to test the process
- Work with a qualified bookkeeper or accountant to ensure a smooth transition
Cloud Bookkeeper uses MTD-compatible software and can help you prepare for the transition. As a Xero Certified Advisor, we ensure your digital records meet HMRC requirements. Speak to us today.