MTD for ITSA delayed for two years

MTD for ITSA delayed until April 2026

MTD for ITSA delayed for two years

The Government announced a two-year delay and changes to the rollout of its Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) initiative. 

MTD for ITSA will now look to begin from April 2026 for a small group of taxpayers rather than launching in April 2024.

The move will give self-employed workers, sole traders and landlords more time to prepare for the upcoming changes.

What is changing with MTD for ITSA? 

From the new start date, instead of MTD for ITSA applying to all self-employed workers and landlords with property or business income of more than £10,000, it will now only apply to those with income exceeding £50,000.

They will have to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software.

Those with an income of between £30,000 and £50,000 will also need to comply with this from April 2027. However, all taxpayers can join voluntarily beforehand if they wish to eliminate common errors and save time managing their tax affairs.

What about smaller businesses?

Originally due in 2024, the Government also announced a review into the needs of smaller businesses, particularly those under the £30,000 income threshold.

The review will consider how the Government can shape MTD for ITSA to meet their requirements and the best way for them to fulfil their Income Tax obligations. It will also inform the approach for any further rollout of Making Tax Digital for ITSA after April 2027.

MTD for ITSA will no longer extend to general partnerships in 2025. However, the Government says it “remains committed to introducing MTD for ITSA to partnerships in line with its vision outlined in the Tax Administration Strategy”.

Under the original plans, MTD would also extend to Corporation Tax, but the Government is yet to confirm when this final phase will begin.

If your business is looking for further advice on Making Tax Digital and how you can make your processes more efficient, arrange a chat with our team today.