Making Tax Digital for Income Tax / MTD ITSA delayed

You may have been aware that Making Tax Digital for Income Tax (MTD ITSA) was due to become compulsory in April 2024.  From that date, all sole traders and landlords with income of £10,000 or more would have had to keep digital financial records submit their tax returns electronically. However, as we reported earlier this month, the Administrative Burdens Advisory Board (ABAB) wanted MTD ITSA delayed for at least a year.

ABAB had five areas of concern and believed that introducing MTD ITSA on time would result in major problems.

Today, the Financial Secretary to the Treasury, Victoria Atkins, confirmed that Making Tax Digital for Income Tax will be delayed for two years. This means it will be introduced in April 2026.

Other changes to MTD ITSA

In her statement, Victoria Atkins also announced the following changes.

• The minimum income reporting threshold is to rise to £50,000, up from £10,000.
• People earning more than £30,000 will join MTD for ITSA from April 2027.
• HMRC will review the situation of self-employed people and property landlords earning under £30,000 at a later date.
• The penalty points-based system will be extended to taxpayers when they join the MTD ITSA scheme.
• MTD will not be extended to general partnerships in 2025 as planned. However, we do not have a new target date.

MTD ITSA delayed – but get ready

Although MTD ITSA is delayed, it’s still a good plan to get ready. If you are a THP client, we offer free MTD-compliant software for both the self-employed and landlords.