Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) will now be mandatory starting in April 2026, rather than April 2024, as previously indicated.
The UK government is aware that companies and self-employed individuals are facing considerable problems as a result of the challenging economic situation.
The transition to MTD for ITSA for self-employed and small landlords is a substantial adjustment for both agents and taxpayers.
In other words, HMRC believes it is appropriate to take the time required to properly implement MTD, leverage the benefits it provides, and test and learn as we go.
Furthermore, HMRC officially announced that self-employed individuals and landlords earning over £50,000 would be required to keep digital records and provide quarterly updates through MTD-compliant software starting in April 2026. The requirement will apply to individuals earning between £30,000 and £50,000 starting in April 2027. It is expected that most taxpayers will be required to do this by April 2027.
The government remains committed to introducing MTD for ITSA to partnerships later, which is yet to be confirmed. Before taking further action, the UK Government will review the needs of smaller businesses, particularly those under the threshold of £30,000. As a result, the MTD for ITSA service will be shaped in a way to focus on people with lower incomes. The UK Government will lay out its plans for any further mandates of MTD for ITSA, in consultation with businesses, taxpayers, agents, and others. This will ensure that they can fulfil their Income Tax obligations in the most effective manner.