The Government has announced that Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) will now be mandated starting from April 2026, rather than from April 2024.
In view of the significant challenges that the transition to MTD is expected to present, the Government hopes that this delay – now the fifth, since the original planned date of 2018 – will allow time to work with taxpayers and agents to mitigate the challenges of the change and maximise the potential benefits derived from it, “testing and learning as we go”.
In addition, increased thresholds will apply and now:
- From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required (mandated) 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 up to £50,000 will need to do this from April 2027.
- Most taxpayers within the scope of MTD for ITSA are expected to be able to sign up voluntarily before they are mandated to do so.
- The introduction of MTD for ITSA to partnerships will be deferred to a later date, to be confirmed in due course.
We welcome this further deferral, but look forward to working with clients to ensure that the eventual transition to MTD will be as smooth and pain-free as possible. As always, please feel free to reach out to your regular DSG contacts if you would like to discuss MTD or any other matters.