Income Tax Self-Assessment – changes to the rollout of Making Tax Digital
The government will introduce Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) a year later than planned, in the tax year beginning in April 2024.
A later start for MTD for ITSA gives those required to join more time to prepare and for HMRC to deliver a robust service, with additional time for customer testing in the pilot scheme.
The government appears to have taken into consideration the disruption that business have experienced during the pandemic, acknowledging the need for a considered approach to managing change at this time.
MTD for Income Tax will now be mandated for businesses and landlords with a business income over £10,000 per annum in the tax year beginning in April 2024.
General partnerships will not be required to join MTD for ITSA until the tax year beginning in April 2025, while the date other types of partnerships will be required to join will be confirmed in the future.
8th October 2021
Under the new regulations, everyone mandated to follow MTD for ITSA rules will have a ‘digital start date’ of 6th April 2024, regardless of their accounting period. This means that the new quarterly reporting deadlines will be the same for all, rather than being linked to a business’s accounting period. Many business owners and landlords will not therefore have an extension and more time to prepare.
Eligible businesses and landlords* do however have the opportunity to gain the benefits of MTD early by signing up to the pilot scheme, which is already underway and will be gradually expanded during the 2022 to 2023 tax year, ready for larger scale testing in the 2023 to 2024 tax year
To take part in the pilot, businesses will need to record their income and expenses in MTD compliant software, which lets them send quarterly income tax updates to HMRC.
Talk to your Old Mill adviser about getting ‘MTD Ready’ and get ahead of the game, or alternatively click here…
*Please note that anyone who has received COVID-19 support payments (other than Statutory Sick Pay) is currently not eligible to take part in the pilot.