Making Tax Digital for Income Tax Self Assessment delayed until April 2024
Making tax digital for income tax is now delayed until 2024 , as confirmed by HMRC on 23 September 2021.
Previously due to begin in April 2023, this delay means that businesses will have an extra year to prepare. HMRC explained that the delay was implemented after listening to stakeholder feedback and in recognition of the challenges faced by the many businesses and their representatives as the country recovers from the pandemic.
Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) or MTD for ITSA as it is often shortened to provides those required to join more time to prepare. It also allows additional time for customer testing on the pilot scheme, which is already underway.
What is Making Tax Digital for Income Tax Self Assessment (MTD for ITSA)?
Making Tax Digital (MTD) was originally launched in April 2019, for businesses with a taxable turnover over the VAT threshold. VAT-registered business that have a taxable turnover below the VAT threshold are required to join the scheme for their first tax return from April 2022. HMRC reports that already 30% of these businesses have signed up voluntary.
With regards to MTD for Income Tax, which is now being introduced for the tax year beginning 06 April 2024, those who are within the scope will be required to maintain digital records and utilise approved software to enable them to update HMRC quarterly. This does not affect when taxpayers are required to pay their tax. Amended penalties are to be introduced for income taxpayers who are required to use MTD for the tax year beginning 06.04.2024.
MTD for Income Tax will also now be mandated from 06.04.2024 for both landlords and businesses with a gross business income above £10,000 per annum.
What is the Making Tax Digital for Income Tax Self Assessment Pilot Scheme?
Businesses and landlords who are eligible can sign up to a pilot scheme, which is already underway. This will be expanded during the 2022/23 tax year, for larger scale testing in the 2023/24 tax year. Businesses can sign up for the pilot scheme here.
MTD for Income Tax – other participants
It will not be compulsory for simple partnerships to join MTD for Income Tax until the tax year beginning 06 April 2025.
The date for complex partnerships to join has not yet been announced and this will be confirmed by HMRC in due course.
Further information on MTD for Income Tax can be found on the government website here.
How Alexander & Co can assist you
At Alexander & Co we are already preparing for Making Tax Digital for Income Tax. If you require assistance our team of expert tax advisors are here to assist you.
Further Information on our comprehensive tax services can be found here.