The UK Government has announced that Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) will now be mandated starting from April 2026, rather than from April 2024.
The Government has stated:
The UK Government understands businesses and self-employed individuals are currently facing a challenging economic environment, and that the transition to MTD for ITSA for the self-employed and small landlords represents a significant change for taxpayers, you as agents, and for HMRC.
That means it is right to take the time needed to work together to implement MTD well, maximise the benefits derived from it, and test and learn as we go.
We will continue to work with you to prepare for the transition to MTD for ITSA, including the testing of the service to ensure that it works for taxpayers and you as agents. You can continue supporting your clients now, by helping them keep digital records and preparing them to sign up ahead of mandation.
The details announced, which may be of particular interest to you, include:
| • | from April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required (mandated) to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software |
| • | those with an income of between £30,000 and up to £50,000 will need to do this from April 2027 |
| • | we anticipate that most taxpayers within the scope of MTD for ITSA will be able to sign up voluntarily before they are mandated to do so |
| • | the UK Government will not extend MTD for ITSA to general partnerships in 2025. The government remains committed to introducing MTD for ITSA to partnerships at a later date, to be confirmed |
| • | the UK Government will review the needs of smaller businesses, and particularly those under the £30,000 threshold before taking further decisions. This will look in detail at how the MTD for ITSA service can be shaped to meet their needs and the best way for them to fulfil their Income Tax obligations. Once that review is complete – and in consultation with businesses, taxpayers, agents, and others – the UK Government will lay out the plans for any further mandation of MTD for ITSA |
If you need help with making the transition for your business contact our Sheffield based Accounting & Business Advisory on 0114 266 4432 or info@smh.group
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