You may recently have read that the MTD for Income Tax deadline has been delayed. Instead of coming into force in April 2023, this stage of Making Tax Digital will now commence at the beginning of the 2024/5 tax year.

So far, so good. We’ve updated our recent post on MTD for Landlords and the Self-Employed to reflect the new dates.

However, the government’s recent announcement goes further than just a change of deadline. April 2024 may seem like a long way away, but two-and-a-half years isn’t really that long – so it’s wise to be prepared.

MTD for Income Tax Deadline 2024 – Self-Employed & Landlords

For clarity, Making Tax Digital for Self Assessment will now be introduced from 6th April 2024. This deadline will apply to the self-employed and landlords with a tax year turnover of £10,000 or more.

MTD for Income Tax Deadline 2025 – Partnerships

We now know that the deadline for general partnerships to join MTD ITSA will be 6th April 2025. The date on which other types of partnerships have to join will be confirmed later. This includes LLPs and partnerships with a corporate member.

Applying MTD ITSA to partnerships is likely to be more complex, hence the extra ‘period of grace’ while HMRC works on this.

Basis Period Reform deadline delayed

It is also now confirmed that the new ‘Basis Period Reform’ will be delayed a year. This reform is designed to ensure that businesses are “taxed in profits arising in a tax year, rather than profits of accounts ending in the tax year”. In other words, it is designed to make MTD easier to introduce.

This measure was going to be introduced in the tax year 2022/23. It will now not come into force before April 2024, with a transition year no earlier than 2023/24.

Starting date not linked to accounting period

Another important change is that all qualifying businesses that existed before April 2023 will have to join MTD for ITSA from 6th April 2024. Previously the starting date could differ, depending on a business’s accounting period.

Where can I find out more?

HMRC’s policy paper on the MTD for Income Tax deadline extension is available here. There’s also a useful HMRC publication online, called Customer Costs and benefits for the next phases of Making Tax Digital.

As always, if you’re a THP client and you’d like any advice on Making Tax Digital, get in touch. We can help you with everything from preparing for and implementing MTD, right through to advice on choosing compatible cloud accounting software.

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About Karen Jones

Having worked for one of the world’s largest accountancy firms, Karen Jones uses her tax knowledge and skills to help clients obtain substantial reductions to their tax liabilities.

With an expanding portfolio of tax clients, Karen enjoys the variety her work brings her and particularly likes working with new businesses and people. With a growing number of tax clients, she frequently faces a variety of challenges and relishes the experience she gains as she solves them.

Karen likes the THP ethos: “I like the way the team has a professional, but friendly and down-to-earth approach – it creates a productive atmosphere that benefits everyone.”

Karen’s specialist skills:

  • Personal Taxation
  • Tax Efficient Planning
  • Trust Administration
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