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Making Tax Digital for ITSA Delayed

MTD extended to April 2026 instead of April 2024 for landlords and self-employed individuals.

Yesterday the self-employed and landlords across the UK breathed a collective sigh of relief as it was announced by the government that MTD for ITSA will be delayed until 2026 considering the “challenging economic environment” faced by these groups, giving them longer to prepare.

The aim of MTD is to simplify and digitalise how self-employment and property income is reported. Records will be sent directly to HMRC and this will also see an evolution in keeping digital accounts.

Here is what you need to know:

  • From April 2026, self-employed people, and landlords with an income of more than £50,000 will be required to use software that is compatible with MTD.
  • This will come into force for those with an income of between £30,000 and £50,000 by April 2027.
  • The government will also hold a review into the needs of smaller businesses, with a focus on those earning less than £30,000. It will look at how MTD for Income Tax Self-Assessment (ITSA) can be adapted to be more effective for smaller firms and inform the approach for the rollout after April 2027.

Making MTD Work for Everyone

Victoria Atkins, Financial Secretary to the Treasury, said: “It is right to take the time to work together to maximise the benefits of MTD for small businesses by implementing the change gradually. It is important to ensure this works for everyone: taxpayers, tax agents, software developers, as well as HMRC.

“Smaller businesses should be able to experience the benefits of increased digitalisation of income tax in a way which meets their needs. That is why we are also today announcing a review to establish the best way to achieve this.”

Jim Harra, chief executive and first permanent secretary at HMRC, said: “HMRC remains committed to the delivery of MTD as a critical part of our strategy for digitalising and modernising the tax system, but we want to make sure we get this right and deliver it effectively.

“A phased approach to mandating MTD for income tax will allow us to work together with our partners to make sure that our self-employed and landlord customers can make the most of the opportunities this will bring.

“The announcement relates to MTD for ITSA only. Making Tax Digital for VAT has already been implemented and is demonstrating the benefits to businesses and the tax system of digital ways of working.”

If you have any questions or queries regarding how your business will be affected by MTD, get in touch today.

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