What is being delayed?
HMRC has announced that plans to implement digital tax reporting for unincorporated businesses and self-employed individuals and landlords in April 2024 will be delayed until April 2026.
Why has MTD been delayed?
HMRC have said that businesses and self-employed individuals are going through difficult economic circumstances at this moment in time. The transition to MTD is a significant change for individuals and businesses. Therefore, HMRC believe it will be beneficial to everyone to delay the implementation of digital tax reporting for small businesses and self-employed individuals and landlords. This will now be introduced in April 2026 instead of April 2024.
Who is affected by this announcement?
Self-employed individuals and landlords with annual business or property income above £10,000 will be affected by this announcement. These individuals will no longer need to follow MTD Income Tax rules from April 2024. This delay means that these individuals will now have at least an additional two years to prepare for the switchover.
Self-employed individuals and landlords with income over £50,000 will be mandated to join from 2026. Those with income over £30,000 will be mandated from April 2027.
The government will review the needs of smaller businesses, particularly those under the £30,000 threshold, before announcing any further requirements.
What about Partnerships?
The government will not extend MTD for ITSA to general partnerships in 2025 as previously planned. This will now follow at a later date.
This is excellent news and we are pleased that HMRC has listened to feedback from the public and professional bodies.
Free initial meeting
Stephen Charles
Tax Partner, Sheffield
Aaron Hemmington
Tax Partner, Northampton
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