MTD For Income Tax Delay to 2024/25 Explained
HMRC has made the bold decision to delay MTD for income tax to 2024/25.
Having listened to stakeholder feedback from businesses and the accounting profession, the government have announced that they will introduce Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) a year later than planned, in the tax year beginning in April 2024.
MTD for Income Tax delay explained
This will give the self-employed and buy to let landlords an extra year to prepare for the digitalisation of Income Tax and also allow HMRC more time for customer testing of the pilot system.
The start date for partnerships to join MTD for ITSA has been put back to the tax year beginning in April 2025.
There has been no change to the £10,000 per annum gross income threshold. So, most self-employed traders and buy to let landlords will be mandated to comply with MTD for income tax from April 2024.
The delay will come as a relief to many and will enable accountancy teams to have more time to plan and execute digital transformations for clients. The announcement won’t deter us from ensuring that clients are ready for MTD.
Getting ready for MTD
According to the official gov.uk site: ‘the government recognises the challenges faced by many UK businesses as the country emerges from the pandemic over the last year. In recognition of this and of stakeholder feedback, we will now be introducing MTD ITSA a year later, in April 2024 instead of April 2023.
‘MTD ITSA builds on the successful introduction in April 2019 of MTD for those VAT-registered businesses with taxable turnover above the VAT threshold and will follow the introduction of MTD for VAT-registered businesses with turnover below the VAT threshold from April 2022.’
Count On Cardens
Your usual Cardens team is here to update you on the latest policy announcements that will affect your business. We can of course discuss the delay if have questions or concerns.
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