The UK Government has delayed the Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) mandatory rollout until April 2026. Our tax experts examine the details and changes announced.
Recent speculation surrounding MTD for ITSA has been confirmed, as the UK Government has announced a two-year delay to mandation.
Originally scheduled for April 2024, the mandatory use of MTD software for income tax reporting will be phased in from April 2026.
According to Victoria Atkins, Financial Secretary to the Treasury, the Government’s revised course of action for MTD intends to ‘maximise the benefits’ and highlights that the mandation of MTD for ITSA must ‘work for everyone’.
Below are some of the key points from the recent announcement.
The latest MTD for ITSA changes announced
As stated, the implementation of the MTD for ITSA is now to be actioned from April 2026, two years later than originally proposed. However, this deadline will only apply to businesses, self-employed individuals and landlords who have income above £50,000. Those with income over the £30,000 threshold will be required to comply with MTD ITSA from April 2027.
Formerly mandated for April 2025, MTD for ITSA requirements will no longer apply to general partnerships. The Government has stated that MTD for ITSA will still be mandated for partnerships, but at a later date.
A review into how MTD for ITSA can best be applied to meet the needs of smaller businesses, particularly those with an income below £30,000, has also been announced, which will take place before the Government make further decisions.
Commenting on the MTD for ITSA changes announced, Victoria Atkins said: “It is right to take the time to work together to maximise the benefits of Making Tax Digital for small businesses by implementing the change gradually. It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC.”
Victoria added: “Smaller businesses in particular should be able to experience the benefits of increased digitalisation of Income Tax in a way which meets their needs. That is why we are also today announcing a review to establish the best way to achieve this.”
Full details on the MTD for ITSA announcement can be found on the Government website.
For more information and professional advice on Making Tax Digital and what these changes mean for you from a compliance perspective, contact our tax team today.
