Making Tax Digital (MTD) for Income Tax was due to be rolled out from April 2024, having already been delayed from April 2023. The Government has now announced it will be further delayed by two years to April 2026.
The proposals were due to require sole traders and landlords with income over £10,000 to file quarterly online returns to HM Revenue & Customs using compatible software.
Treasury issued a written statement stating that the Government understands business and individuals are currently facing a challenging economic environment, and that the transition to Making Tax Digital for Income Tax represents a significant change for taxpayers, their agents and HM Revenue & Customs. The statement confirmed the delay to give more time to prepare.
Furthermore, the income limits from the original proposals have been reviewed and the £10,000 income threshold is being increased to £50,000.
The Government remain committed to digitising the tax system, which will lead to significant changes for taxpayers. Whilst the move to further digitalisation in our future is certain, it is not without challenges.
Rebecca Oatley is an Associate Partner at A C Mole and part of the Tax Team. Rebecca can be contacted at our Taunton office.
